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Being aggrieved by the order of termination of dealership, the petitioner preferred an Appeal as provided in Clause 8.9 of the MDG, which according to the petitioner was to be decided within a period of 90 days from the date of filing of appeal but the same remained pending for more than nine months without any justification and as such the petitioner preferred a writ petition bearing no. 5326 (MB) of 2018, which was disposed of vide judgment and order dated 2.5.2018 with the direction to the appellate authority to decide the appeal on merits by a speaking and reasoned order within a period of one month.

4. In Clause 8.5.2 of the MDG, it has been provided that "all cases of irregularities need to be established before any action is taken against a dealer", however prior to terminating the petitioner's RO no steps were taken by the IOCL for establishing any irregularity and merely on the basis of the inspection report dated 2.6.2017, the exercise of termination was undertaken.
5. The IOCL authorities, did not provide any "pre decisional hearing" to the petitioner, which is mandated in clause 8.6 of the MDG and stipulates that in case of critical irregularities leading to termination, like that of seal tampering, the Head of the State Office/Regional Office/Zonal Office of the concerned OMC or their nominee before recommending/approving the termination of Dealership will provide a personal hearing to the signatories of the dealership or their nominees.

Chapter 5 of the MDG deals with the provisions relating to irregularities at retail outlets/petrol pumps wherein a detailed procedure is prescribed for checking 'short delivery of products' when the tampering of seals of W & M department are found and also when unauthorized fittings in dispensing units are found during inspection. Chapter 8 of the MDG provides the actions which can be taken by the Oil Marketing Companies under the MDG. In Clause 8.5.2, it has been provided that irregularities provided in the MDG need to be established 'before' any action is taken by the Oil Marketing Companies and similarly it is provided in clause 8.6 of the MDG that in case of critical irregularities like tampering in dispensing units etc., the Company may terminate the dealership. However, before recommending termination of dealership, the Company will provide a pre-decisional personal hearing to the retail outlet/petrol pump owner and under Clause 8.5.2, it is provided that unless the critical irregularities are established by the Company after necessarily taking the opinion of the W & M department and the OEM under Clause 5.1.2 (b) and 5.1.4, no action would be taken against the dealer. Clause 8.9 of the MDG contains provision for appeal before the Executive Director (Retail) against the orders passed in cases of critical irregularities as defined in the MDG which includes cases like tampering with the seals etc. The aforesaid appeal is required to be disposed off by the appellate authority, preferably within a period of 90 days from the date of filing of appeal.

The order of termination has also been attacked with vehemence on the ground of not affording opportunity of oral hearing before passing the said order. There is no denial of the said fact by the IOCL. Surprisingly, the appellate authority has observed that as the termination has been done pursuant to the terms and conditions as laid down in the dealership agreement dated 12.9.2012, therefore, clause 8.6. of the MDG is not applicable. This finding of the Appellate Authority is wholly erroneous and per se bad in law. It is settled principle of law that any order which entails civil consequences, must be in conformity with the principle of natural justice. In D.K.Yadav v. J.M.A. Industries Ltd. (1993) 3 SCC 259 it has been held that an order involving civil consequences must be made consistently with the rules of natural justice. Clause 8.6 of the MDG-2012 provides in clear words that in case of critical irregularities leading to termination, like that of seal tampering, the Head of the State Office/Regional Office/Zonal Office of the concerned Oil Manufacturing Company or their nominee before recommending/approving the termination of Dealership will provide personal hearing to the signatories of dealership or their nominee.