Gauhati HC Gives IOC Dealer 30 Days To Appeal Termination Over Alleged Gear, Keeps One Dispenser Operating Pending Appeal

The petitioner, proprietor of M/s Mohamaya KSK, challenged the Corporation’s termination of her dealership after an inspection allegedly found an unauthorized Double Metallic Gear in a dispensing unit.

The petitioner disputed the inspection findings and relied on a later joint inspection, which she said found no additional fitting; she attributed damaged or displaced holographic seals to an accident.

The Corporation relied on the first inspection’s photographs and the later condition of the seals.

After a show-cause process and personal hearing, the Corporation terminated the dealership on 29.11.2019.

The petitioner sought judicial review under Article 226; the Corporation objected that she should pursue the appeal available under the Marketing Discipline Guidelines.

Clause 5.1.4 of the Marketing Discipline Guidelines, 2012 addresses unauthorized mechanisms, fittings or gears likely to manipulate delivery and treats adding, removing, replacing or manipulating parts of a dispensing unit as tampering; it also requires the OEM’s views and independent opinion to be obtained.

Clause 8.2(iv) classifies an irregularity under clause 5.1.4 as critical, for which termination at first instance is prescribed.

Clause 8.9 provides an appeal against an order involving a critical irregularity within 30 days of receipt, with disposal contemplated preferably within 90 days.

The Court also applied the principle that an alternative remedy is not an absolute bar to Article 226 jurisdiction, but is relevant to the exercise of that discretionary jurisdiction, particularly where resolution requires assessment of disputed facts.

The Court considered the competing material—including the first inspection photographs and signed documents, the subsequent joint inspection and OEM observations, the condition of the seals, and the petitioner’s account of the alleged accident—to raise factual questions requiring detailed assessment.

It held that neither the later absence of the alleged gear nor the first inspection findings could be considered in isolation, and that judicial review was not the appropriate forum to reappraise that evidence as an appellate court.

Because clause 8.9 provided an appellate mechanism suited to examination of the record, the Court left the merits to that authority.

The livelihood consequences did not alter that course; the Court noted that one dispensing unit remained operational under an interim order and preserved that arrangement pending the appeal.

She may appeal within 30 days from the judgment; if filed within that period, the appeal must not be rejected as time-barred by reference to the date of the termination order.

The appellate authority must consider the relevant material, provide an effective hearing, and issue a reasoned decision, preferably within 90 days of filing.

The existing arrangement allowing one dispensing unit to operate was continued on the same terms pending disposal of the appeal, subject to any order of the appellate authority.

The parties were directed to bear their own costs.