Deliberate suppression of gainful employment violates material contractual conditions, justifying termination of public utility dealership.

The Appellant was allotted a retail petroleum outlet by the Respondent Corporation, leading to a Dealership Agreement dated 31.03.2018.

Following a complaint from the Appellant's husband, the Respondents discovered statutory tax records (Form-16) showing the Appellant received regular remuneration from a private corporate entity after the dealership began.

The Respondents terminated the dealership on 07.04.2025 for suppression of facts and parallel gainful employment.

The Appellant challenged this via a writ petition, which was dismissed by a Single Judge on 03.07.2025; she subsequently filed this intra-court appeal.

1. Whether the Appellant's engagement as a "Freelance Online Support Consultant" constitutes a breach of the contractual embargo on other employment or business.

2. Whether the termination order was unreasoned and violated the principles of administrative fair play.

3. Whether the doctrine of proportionality precludes termination if no "public harm" was caused by the secondary engagement.

Clause 21 and Clause 28(b) of the Dealership Agreement, which stipulate that a dealer must personally supervise the outlet and shall not take up any other employment or engage in any other business or profession.

Statutory tax disclosures (Form-16) constitute unassailable proof of financial enrichment.

The "Doctrine of Proportionality" as discussed in K. Raheja Corp Private Limited v. State of Maharashtra, noting that remedial measures must bear a rational relationship to the wrong.

The principle that fraud and deliberate suppression of material facts vitiate a contract from inception.

The Court rejected the distinction between "freelance consultancy" and "regular employment," holding that Clauses 21 and 28(b) impose an unqualified embargo on any outside avocation to ensure public safety in handling inflammable products.

The Court found the Appellant’s Form-16 records from 2018–2021 and her resignation date of 21.09.2021 as conclusive evidence that she was gainfully employed for several years while holding the dealership.

Regarding procedural fairness, the Court noted the termination order was "speaking" as it outlined the breach, analyzed the Appellant's explanations, and applied contractual clauses.

The Court dismissed the proportionality argument, ruling that violating the core allotment criteria of personal, undivided management constitutes a material breach that justifies termination regardless of whether tangible "public harm" was demonstrated.

The High Court dismissed the appeal and affirmed the Single Judge's order upholding the termination, vacated the interim status quo order, and noted the Appellant remains at liberty to invoke the contractual arbitration clause.