In Brief
An oil company terminated a petrol dealer's franchise for violations of its Marketing Discipline Guidelines (2012), including stock variation beyond permissible limits and failed quality tests. The dealer challenged the termination, arguing the company failed to follow statutory procedures for sample collection and that mandatory time limits were breached. The High Court set aside the termination. The Supreme Court reversed, holding that the statutory procedure applies only to criminal prosecution, not contractual termination. The time limits in the Guidelines are directory, not mandatory. Where stock variation and sample failure occur together, termination is justified as a critical irregularity. The dealer was afforded natural justice through notice and opportunity to request retesting. The termination was valid and legally sustainable."
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