Natural justice – Audi alteram partem – Right to hearing – Constitution of India Article 14:

On 15-5-2000, an unauthorised police officer accompanied by the respondent BPCL’s officials conducted a raid at the appellants petrol pump and collected samples. On the very next day, without even giving a show cause notice and/or giving an opportunity of hearing, BPCL terminated the appellants dealership. The appellant had been operating the petrol pump for the respondent for the past 30 years. During that period, on a number of occasions, samples were tested by the respondent and were found to be as per the specifications. After unsuccessfully challenging the termination of its dealership before the High Court, the appellant filed the appeal by SLP.

Before the Supreme Court, the appellant contended that its dealership had been terminated in an arbitrary manner and in violation of the principles of natural justice and also in violation of the Motor Spirit and High Speed Diesel Marketing Discipline Guidelines, 1998, section 1(d)(ii) secondly, the search and seizure was by an unauthorised police official.

The Hon’ble Supreme Court observed that the haste with which a 30 years old dealership was terminated even without giving a show cause notice and/or giving an opportunity of hearing clearly indicates that the entire exercise was carried out by the respondent corporation on non-existent, irrelevant and on extraneous consideration. There has been a total violation of the provisions of law and the principles of natural justice. Samples were collected in complete violation of the procedural laws and in non-adherence of the guidelines of the respondent Corporation.

The Hon’ble Court quashed and set aside the termination order of the dealership. Consequently, the respondent Corporation was directed to hand over the possession of the petrol pump and restore the dealership of petrol pump to the appellant.