Supreme Court: Abhay Manohar Sapre, J. speaking for himself and Uday U. Lalit, J. allowed the appeal filed by Indian Oil Corpn. against the judgment passed by the Madras High Court whereby the appellant was directed to resume the fuel supply to respondent’s fuel station.
The parties entered into a dealership agreement whereunder the appellant was to supply fuel to the respondent. Subsequently, on inspection, the totaliser seal was found to be missing. Based on such deficiency the dealership agreement was terminated by the appellant. The respondent made a representation to the appellant against the termination which was rejected. The said decision was upheld by a Single Judge of Madras High Court. However, the Division Bench allowed the appeal of the respondent filed thereagainst and directed the appellant to resume the supply of fuel to the respondent. The instant appeal was filed against this judgment.
The Supreme Court, after considering the decisions of the lower court, held that the Division Bench ought not to have interfered with the decision of the Single Judge. The reasoning of the Single Judge were found correct by the Court. It was noted that the termination of dealership agreement was an administrative function of the appellant. Further, it was observed that High Court cannot interfere with the administrative function of the Indian Oil Corpn. (appellant) especially when the decision of the appellant was based on correct reasoning and there was no arbitrariness. Based on the discussion, the Supreme Court held that the decision of the Division Bench could not be sustained. Accordingly, the appeal was allowed and order of the Single Judge was restored. [Indian Oil Corpn. Ltd. v. T. Natarajan,2018 SCC OnLine SC 698, dated 17-07-2018]