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1. The allegation of tampering of W & M seal was not made in accordance with Clause 5.1.2(b) of MDG inasmuch as the allegation in the show cause notice did not specifically provide as to under which of the three types of tampering of seal as provided in clause 5.1.2(b) is applicable on the petitioner.
2. Prior to issuance of the termination order of the petitioner's RO independent opinion of the W & M authorities was not taken by IOCL, which is clear violation of clause 5.1.2(B) of the MDG.
3. Similarly, prior to issuance of the termination order of the petitioner's retail out, independent opinion of the OEM as provided in clause 5.1.4 of the MDG was not obtained by the IOCL and the dealership was terminated solely on the basis of the joint inspection report itself.

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.

Principles of natural justice require that a person must be allowed an adequate opportunity to present their case where certain interests and rights may be adversely affected by a decision-maker.

Thus, there is clear non compliance of Clause 8.6 of the MDG by the respondent-authorities. Moreover, the respondents have failed to show any rule or regulation to show that when the dealership is terminated as per terms and conditions of the agreement, provisions of the MDG-2012 would not be applicable. It may be clarified that a perusal of the appellate order would show that the appellate authority has rejected the appeal on the ground that dealership has been terminated as per the terms and conditions of the agreement and as such clause no 8.6 of the MDG is not applicable.

The MDG has been enacted for such dealership agreements as the one involved in the instant case and therefore, we are of the view that these guidelines need to be strictly construed by both the parties. Further any dealership agreement cancelled by the respondent corporation cannot be effected on the basis of dealership agreement itself as the MDG have to be followed while taking recourse to such action. The respondent corporation cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standards or norms which are not irrational or irrelevant. Therefore, respondents cannot be exempted from the application of MDG merely by following the dealership agreement. Surprisingly, the appellate authority while passing the impugned order at some places has taken the shelter of the MDG-2012 in rejecting certain pleas as raised by the petitioner.