Petrol pump dealership cannot be terminated on basis of suspicion of tampering

Lucknow, Jul 13 (PTI) The Allahabad High Court on Monday held that a petrol pump dealership cannot be terminated merely on the basis of suspicion or assumption that the dispensing unit had been tampered with. The Lucknow Bench of the court ruled that before cancelling a dealership, an oil marketing company must establish through reliable scientific and technical evidence that the dispensing unit had been tampered with in a manner affecting fuel delivery and also that the dealer was responsible for such manipulation. Justice Irshad Ali passed the order while allowing a petition filed by M/s Sardar Baldev Singh & Company, an Indian Oil Corporation (IOC) dealer operating a retail outlet at Tulsipur in Balrampur district. The bench observed, "The petrol pump dealership was cancelled on the assumption that because there existed taped joints in the pulsar cables and irregularity in the Weights and Measures seals, the dealer must necessarily have indulged in tampering. Such presumption overlooks the settled legal position that suspicion, however strong, cannot take the place of proof." The bench further said, "The IOC was required to establish, through cogent technical evidence, that the alleged irregularities were capable of manipulating delivery and that such manipulation was attributable to the petitioner. No such evidence is forthcoming." The court said that punitive action such as termination of a dealership under marketing discipline guidelines can be sustained only when the allegations are supported by credible technical evidence. Setting aside the dealership termination order of July 4, 2017, as well as the appellate order of May 15, 2018, the court directed IOC to restore the dealership within six weeks and extend all consequential benefits to the petitioner. The dispute arose from an inspection conducted in 2017, during which officials found a taped joint on the pulsar cable of one dispensing unit and a broken weights and measures seal on another unit. However, no unauthorised electronic chip, additional device or other equipment was recovered during the inspection. The authorities also did not detect any short delivery, excess delivery or fuel adulteration. The high court noted that the Corporation failed to produce any scientific or technical report establishing that the taped joint in the cable was capable of influencing fuel delivery. The court held that the mere presence of a cable joint or a damaged seal does not automatically prove tampering by the dealer. It further observed that the dispensing unit in question was an old machine that had earlier been installed at another retail outlet and was not operational at the time of inspection. In the absence of convincing technical evidence linking the dealer to any manipulation, the termination of the dealership was held to be legally unsustainable. PTI COR ABN KSS KSS