Allahabad High Court Quashes ‘Unsubstantiated’ Termination Orders, Directs Corporation to Resume Supply Within a Week
In a landmark decision, the Allahabad High Court has quashed the termination orders against the petitioners, stating that arbitration is “not an efficacious remedy for the restoration of a terminated dealership.” The Court has directed the Corporation to resume the supply to the petitioners’ retail outlet within a week.
The petitioners had been embroiled in multiple rounds of litigation, including arbitration and writ petitions, against the Corporation’s termination orders. The Court found that the Corporation’s allegations of tampering with dispensing units were “unsubstantiated,” noting that no concrete evidence, such as extra wires or attachments, was presented.
“The mere presence of marks on the motherboard was deemed insufficient for termination,” the Court observed. It scrutinized the relevant clauses in the dealership agreement and found that the petitioners did not violate any of these clauses.
The Court also noted that the Corporation did not provide a fitness certificate for the reinstalled dispensing unit, thereby weakening its case against the petitioners. “In absence of such finding against the petitioner, the impugned termination order cannot be sustained in the eyes of law,” the Court stated.
The Court cited a similar case, M/s Modern Service Station Vs. IOC & Others, to bolster its decision in favor of the petitioners, emphasizing the need for substantive reasoning in termination orders.
The Court’s decision has been hailed as a significant ruling that could set a precedent for similar cases involving dealership agreements and termination orders. The Corporation has been directed to resume the supply to the petitioners’ retail outlet within a period of one week from the date of production of a certified copy of this order.
Date of Decision: 04 – 09 – 2023
M/S Aliganj Kisan Seva Kendra, Aliganj And Another vs Indian Oil Corporation Ltd. And 3 Others
