Termination of dealership must be fair - Held by Supreme Court in Hindustan Petroleum Corporation v. Super Highway Services

The Supreme Court has dismissed the appeal of Hindustan Petroleum Corporation which had terminated its dealership agreement with Super Highway Services, a retail dealer. The action was taken after a check on the private company’s stock of high speed diesel for its quality.

The dealer moved the Patna high court, which set aside the termination. The appeal of the public sector undertaking was dismissed by the Supreme Court stating that the dealer did not get proper notice of the quality test. “Cancellation of dealership agreement of a party is a serious business and cannot be taken lightly,” the judgment said.

“The concerned authority has to act fairly and in complete adherence to the rules and guidelines framed for the purpose. No person should be condemned unheard.”