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58. In the case of the petitioners the allegation of short delivery has not been substantiated. Even if it is assumed that there were short deliveries for a period of about one to three weeks, as inspections by the respondents were carried out earlier also and nothing was found by the respondents. Therefore, the next question will be whether the penalty of termination is excessive considering the facts and circumstances of the case.

59. The respondent has contended that the petitioners have violated clauses 45, 47, 16 & 23 of the dealership agreement and therefore under clause 56(k) of the agreement the dealership was cancelled. It is true that whenever the respondent Corporation enters into a dealership agreement it executes a memorandum of agreement which contains provisions for termination of dealership. Clause 56 of the said agreement stipulates that the respondent no.1 is at liberty to terminate the dealership on the happening of certain events mentioned therein. However the Government of India has issued Marketing Discipline Guidelines to ensure that the agreements with the dealers are worked out in a systematic manner and the respondent no.1 corporation does not invoke the termination clause arbitrarily. These Guidelines have been laid down in order to ensure that retail outlets are carried on the principles of highest business ethics and excellent customer service and customers receive product of the right quality and quantity. The purpose is also to ensure that dealers follow the correct and safe practices in handling and dispensing petroleum products, show courteous behavior to customers and provision of uniform code of conduct and discipline is enforced throughout the country dealership network of the industry. For ensuring uniform code of conduct and discipline, the Guidelines also enumerate the nature of irregularities which may be committed by such dealers and the action which is required for such irregularities. Chapter 6 of these Guidelines filed "Prevention of Irregularities at Retail Outlets" stipulates major as well as minor irregularities and provides for the penalties for such major and minor irregularities. At the end of Chapter 6, nine notes are given. Short-delivery of products is treated as major as well as minor irregularity. When weights and measure seals are tampered with, short delivery of products is treated as major irregularity and when weights and measure seals are intact but deliveries are below tolerance limit, short delivery of product is treated as minor irregularity. The penalty for short delivery of products as major irregularity is provided in the following manner:

(ix) Wherever fine with suspension has been provided, fine must be paid within suspension period, failing which suspension would be extended by the equivalent period. If fine is not paid even within the extended period, the dealership would be terminated.

60. The guidelines have been enacted to provide a uniform code of conduct and discipline and to ensure that the agreements with the dealers are worked out in a systematic manner. That being so the respondent Corporation was bound to follow the guidelines while imposing penalties for offences that have been enumerated in the guidelines. In United Engineers Service Station v. Union of India & Anr., this Court had observed, " It has to be kept in mind that the Marketing Discipline Guidelines have force of law having been upheld by this Court in Delhi Petrol Dealer Association & Anr. v. Union of India & Ors., 81(1999) DLT 400. The object is salutary to provide for checks and balances and penalties uniformly by different oil companies while dealing with defaulting dealers. There are a number of violations mentioned and the consequences of such violations or repeated violations. The guidelines are also in furtherance of a larger public policy that there must be uniformity in the manner in which oil companies deal with the dealers. It thus removes any arbitrariness or subjectivity which may creep in such a matter, specially in matters of livelihood of the person concerned."