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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

breaches were noticed and the first respondent was issued a

show cause notice on 14.03.2006 by the Senior Divisional Retail

Sales Manager to which the respondent respondent replied on

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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.

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(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-

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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.