Madhya Pradesh High Court
M/S Sahni Fuels Through Proprietor Shri ... vs Indian Oil Corporation Limited on 11 November, 2025
NEUTRAL CITATION NO. 2025:MPHC-GWL:28656
1 WP-17282-2025
IN THE HIGH COURT OF MADHYA PRADESH
AT GWALIOR
BEFORE
HON'BLE SHRI JUSTICE AMIT SETH
WRIT PETITION No. 17282 of 2025
M/S SAHNI FUELS THROUGH PROPRIETOR SHRI AYANDEEP
SAHNI
Versus
INDIAN OIL CORPORATION LIMITED AND OTHERS
Appearance:
Shri Naval Kumar Gupta - Senior Advocate with Shri Harshavardhan
Topre and Shri YPS Rathore - Advocate for the petitioner.
Shri Sankalp Sharma - Advocate for the respondents.
Reserved on : 11/11/2025
Delivered on : 05/12/2025
.....................................................................................................................
ORDER
1.With the consent of parties, the matter is heard finally.
2. The petitioner has filed the instant writ petition under Articles 226(1) and 226(2) of the Constitution of India claiming the following reliefs:-
"i. That the present writ petition may kindly be allowed. ii. That, the writ in nature of Certiorari against the respondents may kindly be issued and the impugned Termination Notice dated 21.04.2025 bearing No. BHDO/Sahni Fuels issued by Chief General Manager and State Head Madhya Pradesh State Office may kindly be set aside as the same being illegal, arbitrary and without any authority.
iii. That, the respondents may kindly be directed to restart the supply of Petrol (MS)/High Speed Diesel (HSD) and other Petroleum products at the retail outlet/petrol pump of the petitioner in the same manner as it was prior to issuing Signature Not Verified Signed by: VANDANA VERMA Signing time: 05-Dec-25 6:07:51 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:28656 2 WP-17282-2025 of termination notice/letter without forcing the petitioner to enter into any new agreement qua dealership agreement. iv. That, a writ in nature of Mandamus may kindly be issued against the respondents directing them not to harass the petitioner by the illegal acts and by way of the modus operandi adopted by them against the terms and conditions of Marketing Discipline Guidelines, 2012.
v. That, the respondents may kindly be directed to pay to the petitioner compensation towards mental agony and loss of business and good will to the petitioner.
vi. That, the respondents may kindly be directed to pay the expenses of present proceedings and other legal proceedings and vii. Any other relief/direction/order which this Hon'ble Court deems fit in the interest of justice."
3. Brief facts leading to filing of the instant writ petition are as under:-
3.1 The petitioner was awarded a retail outlet dealership of Indian Oil Corporation Limited at District Shivpuri (M.P.) in the year 2022. The respondents, imposed the e-lock charges on the transportation of the motor spirits/high speed diesel, which according to the petitioner was in contravention to the Marketing Discipline Guidelines, 2012 (MDG, 2012) and therefore, the petitioner objected to the said levy by submitting the complaints to the respondents in this regard.
3.2 Initially, vide order dated 17.07.2023, the retail outlet dealership of the petitioner was suspended for a period of 15 days, citing certain shortcomings on the part of the petitioner in operating the dealership in question. The aforesaid suspension order came to be challenged by the petitioner before this Court in W.P. No.21102/2023 wherein, apart from the challenge to the order of suspension, a relief was also prayed by the petitioner seeking a restrain direction to the respondents/Corporation from levying e-lock/maintenance of e-lock charges from the petitioner.
3.3 The said W.P. No.21102/2023 came to be finally disposed of by Signature Not Verified Signed by: VANDANA VERMA Signing time: 05-Dec-25 6:07:51 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:28656 3 WP-17282-2025 this Court vide order dated 05.02.2025 wherein, no interference was caused in the order of suspension, as by then the period of 15 days already stood expired. However, the relief prayed by the petitioner, seeking restrain direction to the respondents/Corporation from recovering e-locking charges from the petitioner was quashed.
3.4 It appears that during the pendency of the said writ petition, vide fact-finding letters dated 2.8.2023 and 18.08.2023 issued by the respondents to the petitioner, the explanation was called for from the petitioner by the respondents that when the committee of the respondents visited the dealership outlet of the petitioner, the committee members were manhandled by using abusive language, they were not allowed to leave the premises as the outlet was barricaded. The committee members were not permitted by the petitioner to seal the nozzles of the dispensing units in compliance of the suspension order dated 17.07.2023, and that the petitioner had tried to tarnish the image of the Corporation by uploading the videos of incidence on social media platforms like YouTube in wrong manner.
3.5 A reply to the said fact-finding letters was submitted by the petitioner through e-mail dated 11.08.2023 (Annexure P/14) refuting the allegations. Thereafter, another show cause notice dated 19.02.2024 was issued to the petitioner by the Corporation wherein, it was stated that when the two-member committee of the Corporation visited the retail outlet premises of the petitioner for implementation of the order of suspension of sales, they were manhandled by the petitioner and also restrained from sealing the nozzles of the dispensing units and accordingly, the petitioner Signature Not Verified Signed by: VANDANA VERMA Signing time: 05-Dec-25 6:07:51 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:28656 4 WP-17282-2025 was called upon to show cause as to why, on the ground of violation of Clauses 42, 43 and 45 of the dealership agreement dated 31.12.2021, the agreement should not be terminated.
3.6 The aforesaid show cause notice dated 19.02.2024 was thereafter challenged by the petitioner before this Court in W.P. No.13222/24 wherein, interference in the show cause notice was declined vide order dated 5.2.2025 and the petitioner was set at liberty to participate in the proceedings conducted by the respondents.
3.7 After disposal of the W.P. No.13222/2024, the respondents have passed the termination order dated 21.04.2025 which is impugned in the instant writ petition.
4. The learned Senior Counsel appearing for the petitioner, by taking this Court to the allegations levelled against the petitioner in the order of suspension dated 17.07.2023, submits that since the petitioner had challenged the order of suspension of the RO dealership by the respondents in a writ petition, and the petitioner had also questioned the levy of e-locking charges forming a policy matter of the respondents which was interfered by this Court in W.P. No.21102/2023, the respondents, feeling offended by way of a counterblast, have cooked up the story of manhandling of the two- member committee and had set up a concocted case against the petitioner making grounds for termination of the agreement.
5. By referring to the show cause notice dated 19.02.2024, forming the subject matter of the termination of the dealership, the learned Senior Counsel submits that though the said notice narrates the incident of Signature Not Verified Signed by: VANDANA VERMA Signing time: 05-Dec-25 6:07:51 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:28656 5 WP-17282-2025 manhandling of the two-member committee of the respondents by the petitioner but no order constituting the said committee or directing the committee to approach the retail outlet of the petitioner has been placed on record. He submits that in fact, the incidence which has been narrated in the show cause notice dated 19.02.2024 never happened.
6. The learned Senior Counsel further submits that for the implementation of the order of suspension of the retail outlet, the officers of the respondents/Corporation are not required to physically visit the retail outlet dealership as the dispensation from the machines can very well be stopped from their own office online. Thus, there is no material on record to suggest that ever, the so-called committee visited the RO dealership of the petitioner.
7. The learned senior counsel also by referring to Clause 8 of the Marketing Discipline Guidelines, 2012 (hereinafter "MDG,2012") (Annexure P/3) submits that the ten days' time as mentioned in the show cause notice was granted to them in terms of Clause 8.5.7 of the Guidelines in order to bring the proposed action of the respondents within the ambit of the guidelines but while passing the order of termination, they have illegally referred to the dealership agreement dated 31.12.2021.
8. He further submits that on 11.04.2024, after receiving the reply to the show cause notice submitted by the petitioner on 23.03.2024, vide communication dated 11.04.2024 (Annexure P/16), the petitioner was called upon to appear for personal hearing before the Executive Director & State Head of M.P. on 26.04.2024. However, in the instant case, the termination Signature Not Verified Signed by: VANDANA VERMA Signing time: 05-Dec-25 6:07:51 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:28656 6 WP-17282-2025 order has been passed only by the State Head and not by the Executive Director.
9. The learned senior counsel appearing for the petitioner submits that the factual averments made by him in the writ petition and as argued by him have not at all been controverted by the respondents in their reply. The only objection raised by the respondents in their reply is as regards the maintainability of the writ petition filed under Article 226 of the Constitution of India in wake of Clause 62 of the agreement dated 31.12.2021 which is an arbitration clause.
10. The learned senior counsel by placing reliance on the judgment of the Supreme Court in the case of E.Venkatakrishna vs. Indian Oil Corporation and Another, Civil Appeal No.4553-54 of 1999 contends that the remedy of arbitration, in the given facts and circumstances of the case, is not an efficacious remedy as, the Arbitrator has no authority to direct for restoration of the contract in case the termination is found to be illegal. The Arbitrator can only grant damages and therefore, the petitioner cannot be left remediless insofar as his prayer for restoration of dealership is concerned.
11. To further substantiate his contentions, he places reliance upon the judgment of the Supreme Court in the case of Sanjana M. Wig vs. Hindustan Petroleum Corporation Ltd., Civil Appeal No.7337/2004 and the Division Bench judgment of this Court in the case of Thapak Petrol Pump vs. Hindustan Petroleum Corporation and other, W.A. No.819/2014 decided on 05.11.2014. Accordingly, he submits that the petition deserves consideration on merits and the relief claimed deserves to be granted.Signature Not Verified Signed by: VANDANA VERMA Signing time: 05-Dec-25 6:07:51 PM
NEUTRAL CITATION NO. 2025:MPHC-GWL:28656 7 WP-17282-2025
12. On the other hand, the learned counsel appearing for the respondents/Corporation by referring to the return filed on behalf of the Corporation, submits that all the factual averments averred by the petitioner in the writ petition have been specifically and categorically denied. He submits that the respondents have taken a specific stand that adjudication of disputed questions of facts is not permissible under writ jurisdiction.
13. He further submits that, in view of the arbitration clause contained in the agreement, the present writ petition is not maintainable. In support of his contention, he places reliance upon the judgment of the Supreme Court in Sanjana M. Wig vs. Hindustan Petroleum Corporation Ltd., Civil Appeal No. 7337/2004.
14. The learned counsel appearing for the respondents further submits that the relationship between the petitioner and the respondents/Corporation is purely contractual in nature, having no element of public law involved. The order of termination of the dealership, does not violate any of the fundamental rights of the petitioner and therefore, on this count as well, the writ petition is not maintainable.
15. He submits that the agreement between the petitioner and the respondent contains an agreement determination clause, and in view of Section 14 of the Specific Relief Act, a contract which is determinable in nature cannot be enforced through Court. The conduct of the petitioner has been found to be violative of the terms and conditions of the dealership agreement, and he has been afforded due opportunity of hearing, though he has not participated in the same inspite of there being an interim order dated Signature Not Verified Signed by: VANDANA VERMA Signing time: 05-Dec-25 6:07:51 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:28656 8 WP-17282-2025 22.05.2024 passed by this Court in W.P. No.13222/2024 and even if, the relief of the restoration of the contract is not available to the petitioner by Arbitrator, the law exists as it is. Once the respondents are of the opinion that it is not feasible for them to continue the contractual relationship with the petitioner, the petitioner cannot be enforced on them. However, he submits that all these disputed question of facts raised by the petitioner can only be effectively decided in arbitration proceedings.
16. He further submits that though the arbitration Clause 62 contained in the agreement provides that an officer of the Corporation shall be the Arbitrator but, in the wake of amendment in Section 12 of the Arbitration and Conciliation Act, 1996, it is open for the petitioner to make a request to the Corporation for appointment of an independent arbitrator or even has the remedy to file application under Section 11 of the said Act for the said purpose. Just because, the arbitration clause provides for a named Arbitrator, the clause cannot be said to be redundant or unenforceable and on these grounds, he prays for rejection of the writ petition.
17. No other point has been pressed by the learned counsel appearing for the parties.
18. Heard the learned counsel for the parties and perused the record.
19. Pursuant to the liberty granted to the respective counsel appearing for the parties, the petitioner as well as the respondents have filed their written synopsis/submissions and the relevant case laws, which are also considered by this Court.
20. The perusal of the pleadings made in the writ petition and the Signature Not Verified Signed by: VANDANA VERMA Signing time: 05-Dec-25 6:07:51 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:28656 9 WP-17282-2025 synopsis filed on behalf of the petitioner indicate that the petitioner, in the instant writ petition is also trying to question the validity of the show cause notice dated 19.02.2024 on various grounds, including the ground of violation of the MDG, 2012. However, looking to the fact that the petitioner had remained unsuccessful in challenging the show cause notice dated 19.02.2024 before this Court in W.P. No.13222/2024 which was dismissed vide order dated 5.2.2025 so also, in W.A. No.869/2025, which was dismissed on 28.03.2025, this Court is not required to go into the aspect of alleged illegalities sought to be contended by the petitioner in the show cause notice dated 19.02.2024.
21. In view of the rival contentions advanced on behalf of the learned counsel appearing for the parties, the preliminary issue which arises for consideration is as to whether, in the given facts and circumstances of the case, the writ petition filed by the petitioner under Article 226 of the Constitution of India challenging the termination of the retail outlet dealership agreement dated 31.12.2021 vide order dated 21.04.2025 deserves to be entertained?
22. The learned senior counsel by referring to the judgment of the Apex Court in the case of Harbanslal Sahnia and Ors. vs. Indian Oil Corporation Ltd., (2003) 2 SCC 107, Perkins Eastman Architects DPC and another vs. HSCC (India) Ltd. 2020 AIR (SC) 59 and the judgment of this Court in the case of Smt. Lata Agarwal vs. The Indian Oil Corporation and Ors. W.P. No.3199/2014 disposed of vide judgment dated 7.8.2014 so also, the Division Bench judgment of this Court in the case of M/s. Thapak Petrol Signature Not Verified Signed by: VANDANA VERMA Signing time: 05-Dec-25 6:07:51 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:28656 10 WP-17282-2025 Pump vs. Hindustan Petroleum Corporation and another W.A. No.819/2014 dated 05.11.2014 has submitted that inspite of there being an arbitration clause in the retail outlet dealership agreement dated 31.12.2021 as contained in Clause 62, the present writ petition is maintainable as the Arbitrator has no jurisdiction to grant the relief of restoration of the retail outlet dealership, and since the relief claimed by the petitioner in the instant writ petition is of restoration of the retail outlet dealership, the petitioner cannot be relegated to arbitration.
23. On the other hand, it has been strenuously argued on behalf of the respondents that the writ petition filed by the petitioner, the pleadings contained therein and the pleadings contained in the rejoinder and additional rejoinder, involve adjudication of highly disputed questions of fact. The writ jurisdiction under Article 226 of the Constitution of India is not available for adjudication of disputed questions of facts particularly, when the remedy of arbitration is provided in the contract itself. That apart, the retail outlet dealership agreement dated 31.12.2021 being itself determinable in nature in terms of Clause 45 therein, the relief of restoration itself may not be available to the petitioner, as has been interpreted by the Apex Court in the case of Sanjana M Wig vs. Hindustan Petro Corporation Ltd., AIR 2005 SC 3454.
24. In view of the above submissions, the pleadings made in the writ petition, the arguments advanced by the learned Senior Counsel appearing for the petitioner as well as the respondents are to be taken into consideration. The very first initial fact-finding letter dated 2.8.2023 and the Signature Not Verified Signed by: VANDANA VERMA Signing time: 05-Dec-25 6:07:51 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:28656 11 WP-17282-2025 subsequent letter dated 18.08.2023 (Annexure P/13) indicates that it is the case of the respondents that pursuant to passing of the suspension order dated 17.07.2023, when the committee of officers of respondents visited the retail outlet dealership of the petitioner, they were manhandled by using abusive language, they were not allowed to leave the premises as the outlet was barricaded. The committee members were not permitted by the petitioner to seal the nozzles of dispensing units in compliance of the suspension order dated 17.07.2023 and that the petitioner had tried to tarnish the image of the Corporation by uploading the videos of incidence on social media platforms like YouTube in wrong manner. Even the show cause notice of termination dated 19.2.2023 reiterates the said incidence and alleges violation of Clauses 42, 43 and 45 of the retail outlet dealership agreement.
Clause 42 of the agreement dated 31.12.2021 reads as under:-
42. The Dealer shall at all times faithfully, promptly and diligently observe and perform and carry out at all times all directions, instruction, guideline and orders given or as may be given from time to time by the Corporation or its representative (s) safe practices and marketing discipline and/or for the proper carrying on of the Dealership of the Corporation. The Dealer shall also scrupulously observe and comply with all laws, rules, regulations and requisitions of the Central/State Government and of all authorities appointed by them or either of them including in particular the Chief Controller of Explosives, Government of India and/or any other local authority with regard to the safepractices.
25. Whereas, the learned Senior Counsel appearing for the petitioner in his arguments had seriously disputed the very happening of the said incidence and submitted that there is no order passed by any authority on record to indicate that the said committee was in fact ever constituted which is alleged to have visited the premises of the petitioner. He submitted that Signature Not Verified Signed by: VANDANA VERMA Signing time: 05-Dec-25 6:07:51 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:28656
12 WP-17282-2025 feeling offended by the act of the petitioner in raising his voice against the levy of e-locking charges the entire story has been cooked up against the petitioner.
26. A perusal of the pleadings in the writ petition, particularly paras xiii to xvii, indicates that the petitioner has, in fact, admitted the occurrence of an incident involving the visit of the committee members to the retail outlet on 25.07.2023, and that on account of the alleged altercation, the petitioner lodged complaints before the police authorities.The copies of the complaints are also placed on record along with the pleadings filed by the petitioner. The oral arguments thus advanced on behalf of the petitioner runs contrary to own pleadings made in the petition.
27. Whether the incidence has actually happened or not is a seriously disputed question of facts, which cannot be adjudicated in the present writ proceedings under Article 226 merely on the basis of exchange of affidavits. The happening/non-happening of the said incidence is required to be established by leading evidence, which can be done only before the Arbitrator.
28. It is not the case wherein, the violation of principles of natural justice has been alleged by the petitioner in passing of the impugned termination order dated 21.04.2025. The petitioner in response to the notice dated 19.02.2024 duly submitted his reply. As per the pleadings of the parties, inspite of being afforded an opportunity of personal hearing and interim order dated 22.05.2024 passed in W.P. No.13222/2024 filed by the petitioner himself, the petitioner has not availed the same. The termination Signature Not Verified Signed by: VANDANA VERMA Signing time: 05-Dec-25 6:07:51 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:28656 13 WP-17282-2025 order impugned in the instant writ petition cannot be said to be without jurisdiction.
29. The petitioner is not seeking enforcement of any fundamental right. The rights asserted by him emanates solely from the retail outlet dealership agreement dated 31.12.2021 which, in terms of Clause 45 thereof, is determinable in nature. The contract between the petitioner and the respondents, along with the dispute between them, does not involve any element of public law.
30. The Apex Court in the case of Sanjana M Wig (supra) in para 25 has held as under:-
25. Where under a statute there is an allegation of infringement of fundamental rights or when on the undisputed facts the taxing authorities are shown to have assumed jurisdiction which they do not possess can be the grounds on which the writ petitions can be entertained. But normally, the High Court should not entertain writ petitions unless it is shown that there is something more in a case, something going to the root of the jurisdiction of the officer, something which would show that it would be a case of palpable injustice to the writ petitioner to force him to adopt the remedies provided by the statute."
It may be true that in a given case when an action of the party is de'hors the terms and conditions contained in an agreement as also beyond the scope and ambit of domestic forum created therefore the writ petition may be held to be maintainable; but indisputably therefore such a case has to be made out. It may also be true, as has been held by this Court in Amritsar Gas Service (supra) and R. Venkatakrishna (supra), that the arbitrator may not have the requisite jurisdiction to direct restoration of distributorship having regard to the provisions contained in Section 14 of the Specific Relief Act, 1963; but while entertaining a writ petition even in such a case, the court may not loose sight of the fact that if a serious disputed question of fact is involved arising out of a contract qua contract, ordinarily a writ petition would not be entertained. A writ petition, however, will be entertained when it involves a public law character or involves a question arising out of public law functions on the part of the respondent.
Signature Not Verified Signed by: VANDANA VERMA Signing time: 05-Dec-25 6:07:51 PMNEUTRAL CITATION NO. 2025:MPHC-GWL:28656 14 WP-17282-2025
31. The Apex Court in the case of Sanjana M Wig (supra) has duly taken note of the earlier judgments in the case of Harbanslal Sahnia (supra) relied upon by the petitioner and also the judgment in the case of Indian Oil Corporation Limited vs. Amritsar Gas service and others (1991) 1 SCC 533 a n d E.Venkatakrishna (supra) holding that the arbitrator is not having jurisdiction to grant the relief of restoration of distributorship. However, the same is in regard to the provisions contained in Section 14 of the Specific Relief Act, 1963. Yet, the Apex Court in the case of Sanjana M Wig (supra) has held that if serious disputed questions of facts arise out of a contract, ordinarily the writ petition would not be entertained. The case laws thus relied upon the petitioner in support of the said proposition have been considered by the Apex Court in the case of Sanjana M Wig (supra).
32. It is fairly well settled in law that entertaining a writ petition despite availability of an alternative remedy is a matter of judicial discretion and not compulsion. Such discretion is to be exercised keeping in view the facts and circumstances of a particular case, and no straitjacket formula can be prescribed. In the factual backdrop noted hereinabove, and in light of the seriously disputed questions of facts requiring adjudication on the basis of evidence to be led by the parties, this Court is not inclined to exercise jurisdiction under Article 226 of the Constitution of India. Accordingly, interference is declined, while reserving liberty to the petitioner to avail the remedy of arbitration for adjudication of the dispute in question. In the event arbitration before the named arbitrator under the agreement is not feasible, the petitioner shall be at liberty to seek appointment of a neutral arbitrator in Signature Not Verified Signed by: VANDANA VERMA Signing time: 05-Dec-25 6:07:51 PM NEUTRAL CITATION NO. 2025:MPHC-GWL:28656 15 WP-17282-2025 accordance with law. If, upon adjudication, the arbitrator records a finding that the termination of the petitioner's retail outlet dealership was illegal, then the petitioner shall be free to approach the respondents seeking restoration of the dealership, which shall be considered and decided by the respondents in accordance with law.
33. With the aforesaid observations, the petition stands disposed.
34. Pending application (s), if any, shall stand closed.
(AMIT SETH) JUDGE Van Signature Not Verified Signed by: VANDANA VERMA Signing time: 05-Dec-25 6:07:51 PM