IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.3643 of 2009 Dehri Cooperative Development & Cane Marketing Union Limited situated at Pali Road, Dehri-on-Sone, District-Rohtas through its President Akhilesh Kumar, S/o-Late Harihar Singh, R/o-Qtr. No. 21 Dalmiya Nagar, P.S. Dehari, District- Rohtas. -Petitioner. VERSUS 1. The Indian Oil Corporation Ltd. through its Senior Area Manaager, 1st Floor, Shahi Bhawan, Exhibition Road, Patna. 2. The Area Managaer (L.P.G.-S), Gaya Marketing Division, Eastern Region, Indian Oil Corporation Ltd. Block-A, Mourya Lok Complex, (3rd Floor) Dak Bunglow Road, Patna. 3. The State of Bihar through the District Magistrate, Rohtas (Sasaram). 4. The Superintendent of Police, Rohtas (Sasaram). -Respondents. ----------- Advocates for the Petitioner : Mr. Gajendra Pratap Singh. Mr. Ashwani Kumar Singh. Mr. Pankaj Kumar Singh. Advocate for the IOC : Mr. Anil Kumar Jha. Advocate for the State : SC-21. ------------- 03 14.05.2009 The petitioner is aggrieved by the order of the Indian Oil Corporation, as contained in Annexure-2 dated 03.02.2009, by which the petitioner has been informed that its distributorship has been put under suspension “in line with the order of the district administration” and for non-improvement in performance. Learned counsel for the petitioner submits and it is not disputed in the counter affidavit that before taking action to suspend the dealership the petitioner was not given any opportunity against any alleged irregularity or illegality committed. In fact, as per the impugned order, there is neither any irregularity nor illegality alleged. The impugned order, it is submitted clearly shows that the licence has been suspended more because it was so asked by the district administration. Secondly, it is submitted that petitioner by communication dated 2 23.01.2009 was told to make certain improvements in his working and report within 10 days of receipt of the said letter. Even before the 10 days period expired without any further verification and/or enquiry the dealership has been suspended. It is then submitted that under the marketing guidelines, it is clearly provided that before if any punitive action is to be taken, the dealer will have to be given an opportunity to explain. This is also a basic principle of natural justice. Having heard the parties and with their consent the writ petition is disposed of at this stage itself. It cannot be disputed now that distributorship is a valuable property. Indian Oil Corporation is State within the meaning of Article 12 of the Constitution. It is well established that even in matters of contract the Corporation is governed by Article 14 of the Constitution. It cannot act arbitrarily or whimsically. Its actions must be just and fair when such a punitive action having drastic repercussion is to be taken then ordinarily expected that it would be preceded by a show cause notice. Undisputedly, in the present case, there was no such notice issued to the petitioner. From reading the notice, it is clear that there is no allegation of any irregularity or illegality committed by the petitioner. But, in fact, the action is being taken at the instance of the district administration. Unfortunately, it appears that the Indian Oil Corporation, which is an independent authority, has wrongly subordinated itself to the district administration. The district administration cannot interfere in this matter. The District Magistrate is 3 not the Licensing Authority. Thus, seen the impugned order, as contained in Annexure-2 dated 03.02.2009, cannot be sustained. I may only refer to the judgment of the Apex Court in the case of S.L. Kapoor Vs. Jagmohan & Ors. since reported in AIR 1981 Supreme Court 136, wherein their Lordships have held thus:- “…….The requirement of natural justice are met only if opportunity to represent is given in view of the proposed action. The demands of natural justice are not met even if the very person proceeded against has furnished the information on which the action is based, if it is furnished in a casual way or for some other purpose. The person proceeded against must know that he is being required to meet the allegations which might lead to a certain action being taken against him. If that is made known the requirements are met……” It is not disputed that even as per the marketing guidelines such an action could not be taken without prior notice to the parties. In that view of the matter, Annexure-2 dated 03.02.2009, cannot be sustained and is quashed. The writ petition is allowed. Trivedi/ (Navaniti Prasad Singh, J.)