APHC010046182019 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI WRIT APPEAL NO: 45 of 2019 Bench Sr.No:-97 [3584] M Bhoopal Singh ...Appellant Vs. Bharat Petroleum and Others ...Respondent(s) ********** CORAM :THE CHIEF JUSTICE LISA GILL SRI JUSTICE CHALLA GUNARANJAN DATE : 27th July 2026 Present: Advocate for Appellant: SRINIVASA RAO PUTLURI Advocate for Respondent: V V SATISH JUDGMENT: (per Hon’ble Sri Justice Challa Gunaranjan) This appeal is directed against the order dated 17.12.2018 passed in W.P. No.30591 of 2014, whereby learned Single Judge dismissed the writ petition, by which, the appellant/writ petitioner challenged the order of termination of dealership. 2. (a) The appellant/writ petitioner was appointed as dealer in retail outlet under Kisan Seva Kendra (KSK) category as per letter of appointment dated 01.12.2005. Thereafter, dealership 2 HCJ & CGR, J W.A.No.45 of 2019 agreement came to be executed on 05.05.2006. An inspection was conducted on 10.10.2013 at the petrol outlet operated by the appellant. As per the report of respondents, there were marginal variations in stocks, however, they were within the permissible limits. Further, the weights and measures seal was intact and totalizer seal was also intact. Yet again, another inspection came to be conducted on 12.10.2013. During the second inspection, the lead seal on motherboard was found to be tampered and unauthorised printed circuit board chip was found to be soldered to the pulsar cord of nozzle and because of the insertion of unauthorised/extra outfits, stock variation was found to be beyond permissible limits. (b) On account of the same, 2nd respondent issued show-cause notice dated 09.11.2013 calling upon appellant to submit explanation for the alleged irregularities. Appellant submitted explanation on 20.11.2013. Chief Manager Sales, (Retail) South, issued notice dated 14.02.2014 to the appellant informing of personal hearing scheduled on 26.02.2014 at Regional Office, Chennai. Appellant attended the hearing and the same stated to have been conducted before Executive Director – Retail, Chennai. Eventually, impugned termination order dated 20.09.2014 was 3 HCJ & CGR, J W.A.No.45 of 2019 passed by the 2nd respondent. Assailing the same, appellant preferred writ petition. (c) Learned Single Judge dismissed the writ petition holding that petitioner was provided sufficient opportunity including personal hearing before passing the impugned order, that the nature of allegations were critical in nature and the impugned order was passed after approval of the competent authority i.e., Director (Marketing) in terms of clause 8.8 of Marketing Discipline Guidelines – 2012 and lastly that the writ petitioner instead of availing alternative remedy of appeal has invoked the jurisdiction under Article 226, which was not permissible and therefore dismissed the writ petition. (d) Assailing the same, present writ appeal is preferred. 3. Heard Sri Srinivasa Rao Putluri, learned counsel appearing for appellant and Sri V.V.Satish, learned counsel, appearing for respondents. 4. (a) Learned counsel for appellant has raised three issues for consideration: (i) that the order of termination of dealership is liable to be set aside for the sole reason that though 2nd respondent had issued a showcase notice and that he was supposed to have 4 HCJ & CGR, J W.A.No.45 of 2019 conducted the enquiry including personal hearing, rather, the hearing was conducted by Executive Director (Retail), South Regional Office at Chennai and that the impugned order came to be passed by 2nd respondent/Territory Manager (Retail), Nellore. Therefore, the entire enquiry and proceedings thus stand vitiated. (ii) that though clause 8.8 of Marketing Discipline Guidelines envisage that the termination of dealerships in case of SC/ST categories should be with approval of Director (Marketing) Head Quarters, the impugned order of termination does not mention or refer to having such requisite approval being granted and even otherwise, the approval as envisaged above should not be mere formality, but rather based on proper application of mind. (iii) that the impugned order of termination of dealership without consultation of Civil Supplies Department in terms of clause 8.10 of Marketing Discipline Guidelines is non est. (b) Regarding the merits of the matter, it is contended that when the first inspection report dated 10.10.2013 found the seals to be intact and no variation of stock beyond permissible limits was found, the second inspection conducted on 12.10.2013 in complete 5 HCJ & CGR, J W.A.No.45 of 2019 divergence mentions that the seals were tampered and foreign material was introduced into the dispenser, besides noticing variation in the stock, which appellant stated to have not acknowledged nor signed, the explanation offered by the writ petitioner with regard to the said aspects was not at all properly dealt with. One of the reasons being the authority which conducted personal hearing really did not pass the impugned order. Therefore, it has been urged to set aside the impugned termination order and remand the matter back for reconsideration. 5. (a) On the other hand, learned counsel appearing for respondent Corporation, while vehemently opposing the contentions raised above, supported the order of learned Single Judge. He submits that a panel of officers conducted personal hearing on 26.02.2014, which included not only the Executive Director (Retail), but also the 2nd respondent and after considering all the objections of the dealer, decision was taken to terminate the dealership, as it was falling within critical irregularities envisaged under clause 8.2 of Marketing Discipline Guidelines. Further, the matter was placed before Director (Marketing) for approval, which came to be granted on 18.06.2014 and only thereafter, the impugned order was passed on 20.09.2014, therefore, the 6 HCJ & CGR, J W.A.No.45 of 2019 respondents have not only given due opportunity to the petitioner but also scrupulously followed the procedure prescribed under Marketing Discipline Guidelines. (b) Further, it is contended that the second inspection report clearly found that the seals were tampered with and unauthorised fittings were found, capable of manipulating the equipment and thereby, clear stock variation was observed beyond permissible limit necessitating stringent action and the enquiry has clearly established the same, hence, rightly, learned Single Judge refused to interfere with the findings on merits and even otherwise, as there was efficacious alternative remedy. Therefore, learned counsel pleaded for dismissal of the appeal. 6. We heard learned counsel for the parties and perused the record. 7. The appellant had been granted MS/HSD dealership for a period of 15 years and accordingly agreement came to be concluded. Alleging that appellant had indulged in certain irregularities, 2nd respondent had issued show-cause notice dated 09.11.2013. Apparently, the show-cause notice emanated on account of two inspections stated to have been conducted on 10.10.2013 and 12.10.2013. During the first inspection, though 7 HCJ & CGR, J W.A.No.45 of 2019 seals were found to be intact and no variations of stock observed beyond permissible limits, yet another inspection stated to have been conducted on 12.10.2013. During the second inspection, the lead seal on motherboard was found to be improper, further, an unauthorised printed circuit board chip was noticed to be soldered to pulsar cord, which resulted in variation of stocks, thereby, appellant was show-caused for the irregularities pointed out. Appellant was called upon to attend personal hearing scheduled to be held on 26.02.2014. 8. As seen from the proceedings of personal hearing, it appears the hearing took place before Executive Director - Retail, Southern Region at Chennai. It also reflects that besides the appellant and Executive Director, even the 2nd respondent - Territory Manager (Retail) was also present during the hearing. The said proceeding has been signed by all the three participants. Subsequently, note dated 13.05.2014 was forwarded to Director (Marketing), signed by Chief Manager, RNP (South) and Chief Manager Sales (Retail), South and concurred by DGM Retail, GM (Sales) Retail HQ and GM RHQ (Brand & ARB). 9. Further, the said note stated to have been approved by Director (Marketing) on 18.06.2014. The proceeding, which 8 HCJ & CGR, J W.A.No.45 of 2019 indicates granting of such approval, apparently emanated and signed by Executive Director (Retail). Thereafter, the impugned order dated 20.09.2014 came to be issued by 2nd respondent. 10. The reason for narrating all the above is to drive home the point that the initial show-cause notice was issued by 2nd respondent, hearing came to be conducted by Executive Director, though in the presence of 2nd respondent, note was put up by different set of persons to the Director (Marketing) and eventually, the approval note came to be emanated from Executive Director, which culminated into issuance of impugned order by 2nd respondent. 11. The procedure adopted above is not traceable to Marketing Discipline Guidelines. It is fundamental principle of law that the concept of judicial hearing requires person who is conducting personal hearing alone is required to pass the order, inasmuch as the said officer alone would be in a position to appreciate the arguments and contentions advanced during the personal hearing, otherwise, the same renders empty formality. Apparently, in the present case, personal hearing was conducted by one authority and impugned order has been passed by another authority. We, 9 HCJ & CGR, J W.A.No.45 of 2019 therefore, are of the view that such procedure followed in this case offends basic principle of judicial procedure. 12. The respondents sought to rely on the proceedings stated to have been issued by the Executive Director (Retail), which indicates that there was due approval from Director (Marketing), to be in compliance of clause 8.8. On perusal of the same, it is evident that Director (Marketing) had endorsed approval to the proposed decision of termination on 18.06.2014. Though in terms of clause 8.8, the approving authority need not provide elaborate reasons concurring with the proposed decision, nevertheless should reflect proper application of mind to the facts and circumstances leading to the proposed decision, which is clearly lacking. Further, even the impugned termination order does not refer to any such approval. This further fortifies our view that the enquiry conducted was not in accordance with the Marketing Discipline Guidelines. 13. The appellant also canvassed another issue regarding non-compliance of clause 8.10, which requires prior consultation with local civil supplies authorities, inasmuch as, the appellant was holding SKO/LDO dealership. This issue was not raised before the respondents earlier, at any rate, since now we propose to remand 10 HCJ & CGR, J W.A.No.45 of 2019 the matter back to the 2nd respondent, we leave it open to the appellant to raise the same before the 2nd respondent. 14. In view of the observations made above, both the order of learned Single Judge as well as the impugned termination order are hereby set aside and the matter is remanded to the 2nd respondent for conducting de novo enquiry. It is needless to say that appellant/writ petitioner shall be given opportunity of personal hearing and after considering the objections, appropriate speaking order be passed within a period of three months from the date of receipt of copy of the order. The appellant is given liberty to raise all objections including those raised and argued before us, and it is made clear that we have not expressed any opinion on the merits of the matter. 15. With the above direction, this writ appeal is disposed of. No costs. As a sequel, miscellaneous petitions pending in this case, if any, shall stand closed. LISA GILL, CJ CHALLA GUNARANJAN, J SS