Termination of Distributorship for Alleged Suppression Held Arbitrary Where Corrected Land Title Metadata Does Not Amount to Fraud.

The petitioner was appointed as an LPG dealer in 2017 after offering 20 decimals of land, exceeding the requirement of 13.49 decimals.

Upon physical verification by revenue and Corporation authorities, the site was found suitable and a godown was constructed.

Initial complaints regarding land area were closed after verification.

However, following a later complaint by a local MLA, the Corporation issued a Show Cause Notice alleging suppression of material facts.

The Corporation argued that the sale deed cited (No. 1772 of 2013) only covered 12 decimals and that a subsequent deed for 8 decimals was concealed.

Consequently, the Corporation terminated the Distributorship Agreement on July 13, 2023.

The petitioner challenged this termination as arbitrary and illegal.

1. Whether the termination of the LPG Distributorship Agreement on grounds of alleged suppression of land area was legally sustainable given the physical possession and construction over the required area.

2. Whether the non-disclosure of a supplementary sale deed intended to rectify technical title issues constitutes "fraud" or "material suppression" justifying termination.

The Court applied the principles of administrative fairness and the prohibition of "hyper-technical" approaches by State instruments under Article 12 of the Constitution.

It relied on the precedent set in CWJC No. 7292 of 2020, which held that rectifiable errors or inadvertent discrepancies that do not violate essential advertisement conditions cannot be used to declare a candidate ineligible.

The court distinguished several precedents on fraud and service law cited by the Respondent—including District Collector v. M. Tripura Sundari Devi (1990) and Meghmala v. G. Narasimha Reddy (2010)—finding them inapplicable where no actual intent to deceive or material deficiency exists.

The Court reasoned that the petitioner had purchased 20 decimals under specific boundaries in 2013 and remained in physical possession.

The execution of a second sale deed in 2014 was a bona fide attempt to avoid technical revenue complications, not an act of fraud.

Significantly, the physical verification by both the Revenue Department and the Corporation confirmed the godown was constructed on 20 decimals, which exceeded the 13.49-decimal requirement.

The Court found that the Corporation had previously examined and rejected similar complaints, and the current action, prompted by a local MLA, was "too harsh" and lacked merit.

The Court emphasized that since the petitioner actually possessed the required land, the failure to mention the second deed was a non-material technicality.

The Court ordered the immediate restoration of the petitioner’s LPG dealership and directed that the petitioner be allowed to continue operations without impediment. The writ petition was allowed.