SC relief to IOC on dealership termination

A bench headed by Justice B N Agarwal recently stayed the High Court order that asked the oil company to revoke its cancellation order against Pestonji Brothers as there was no complaint against it for the last four decades. It also issued notice to the dealer.     

The High Court had held that the punishment of termination was too harsh and disproportionate especially in view of the fact that there was never a complaint against the respondent with regard to malpractice, adulteration or short supply.     

Pestonji Brothers was appointed as C-site dealer for retail sales of oil and oil products by the Indian British Petroleum Corporation now merged with Indian Oil Corporation.     

On routine inspection required under the Marketing Discipline Guidelines 2005, the IOC sales officer had found that the totaliser seal of the HSD unit dispensing seal was broken and sales were still being effectuated from the unit. Besides, it was also found that there was variation in the stocks beyond permissible limit.     

However, the dealer had refuted allegations saying the seal was inadvertently broken while cleaning the dispensing unit and the information about the same was sent to Weights and Measures department.     

Besides, Pestonji had stated that evaporation losses were higher when stock levels were generally low and the underground tanks were never exactly horizontal and had tilted over a period of time resulting in magnification of errors in the dip readings.    

The General manager after taking into account the entire evidence had terminated the dealership and asked the dealer to handover the entire equipment belonging to IBP Co without any resistance in July 2007.