Indian Oil Corpn vs M/S. Lala Bhairo Prasad Saraf And Sons

NON-REPORTABLE IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No(s). 7433 OF 2019 (Arising out of SLP(C) No(s). 17242 of 2008)

GENERAL MANAGER, INDIAN OIL CORPORATION & ANR. Appellant(s)

VERSUS

M/S. LALA BHAIRO PRASAD SARAF AND SONS & ANR. Respondent(s)

J U D G M E N T

R. BANUMATHI, J.:

(1) Leave granted.

(2) This appeal arises out of judgment and order dated

21.04.2008 in and by which the High Court of Judicature at

Allahabad has set aside the order of termination of the

dealership of the respondent-firm on the ground that there was

violation of principles of natural justice. Being aggrieved,

Indian Oil Corporation Ltd. has preferred this appeal.

(3) Respondent no.1 is a partnership firm running a retail

outlet of the Indian Oil Corporation Ltd. (IOC) for selling the

petroleum products at Purani Bazar, Karvi Town, District

Chitrakoot. On 13.02.2006 an inspection was carried out in the

first respondent’s retail outlet and certain irregularities and Signature Not Verified

breaches were noticed and the first respondent was issued a Digitally signed by MAHABIR SINGH Date: 2019.09.24 16:51:55 IST Reason: show cause notice on 14.03.2006 by the Senior Divisional Retail

Sales Manager to which the respondent respondent replied on 2

23.08.2006. Another show cause notice on 01.08.2006 was again

issued to the said respondent which was suitably replied by the

first respondent on 10.08.2006. It is stated that further

inspection was again carried out on 21.07.2006 and certain

irregularities are said to have been noted. Again another show

cause notice dated 19.08.2006 was issued to which the first

respondent-dealer replied on 29.08.2006. By the Order dated

27.11.2006, General Manager, Indian Oil Corporation Ltd.,

terminated the retail outlet dealership of the first

respondent.

(4) Being aggrieved by the termination of the dealership, the

first respondent filed a writ petition before the High Court

which was allowed by the High Court as aforesaid. The High

Court held that the first respondent has been denied the

opportunity before passing the impugned order and the action of

the appellant-Corporation is violative of the principles of

natural justice. However, considering the facts and

circumstances of the case, the High Court quashed the order of

termination of dealership of the first respondent and the

appellant-Corporation was directed to resume the supply of

petroleum products to the respondent-firm.

(5) Being aggrieved, the Indian Oil Corporation Ltd. has

preferred this appeal.

(6) We have heard Ms. Madhvi Divan, learned Additional

Solicitor General appearing for the appellant-Corporation and

Mr. Virag Gupta, learned counsel appearing for the first

respondent and also perused the impugned judgment. 3

(7) The main ground on which the High Court set aside the

termination was the violation of principles of natural justice.

If the High Court was of the opinion that there was violation

of principles of natural justice, the High Court ought to have

directed the appellant-Corporation to afford opportunity to the

respondent(s) to file the reply and pass a reasoned order which

would have been the appropriate course of action.

(8) However, when this Court expressed the view that the

matter has to be remanded back to the concerned authority for

affording fresh opportunity to the first respondent and pass a

reasoned order, Mr. Virag Gupta, learned counsel appearing for

the first respondent, on instruction, has submitted that the

respondent is no longer interested in continuing the dealership

and submitted that the respondent has already faced lot of

hardship over the years. The Counsel, Mr. Virag Gupta, has

further submitted that the respondent would be satisfied if the

security amount of Rs.7,05,746/- (Rupees Seven Lakhs Five

Thousand Seven Hundred Forty Six) deposited with the appellant-

Corporation is refunded to the first respondent. In this

regard, it is stated that the respondent has already sent

Letters dated 14.12.2007 and 12.02.2009.

(9) In view of above, since it is stated by the first

respondent-firm that they are not interested in continuing the

dealership and also going before the authorities for fresh

enquiry. Taking note that the matter has been pending for

quite some time, we are of the view that to give quietus to the

matter it would be appropriate to direct the appellant- 4

Corporation to refund the security amount of Rs.7,05,746/-

(Rupees Seven Lakhs Five Thousand Seven Hundred Forty Six)

within a period of six weeks from today. Ordered accordingly.

The appellant-Corporation is permitted to remove all the

equipments and other fittings including fittings in the

underground tank within a period of eight weeks. The first

respondent-firm shall render all cooperation to enable the

appellant-Corporation to remove all the fittings and fixtures.

Since the litigation has been pending for quite some time, we

are not inclined to direct awarding of any interest on the

principal amount.

(10) With the above directions, the appeal is disposed of.

..........................J. (R. BANUMATHI)

..........................J. (A.S. BOPANNA) NEW DELHI, SEPTEMBER 19, 2019.