30-Day Deadline For Issuing Show Cause Notice Under OMCs’ Marketing Discipline Guidelines Is ‘Mandatory’: Allahabad HC

The Allahabad High Court has held that the 30-day deadline for issuing a show cause notice, as outlined in Clause 8.5.6 of the Marketing Discipline Guidelines, 2012, framed by the Oil Marketing Companies (OMCs), is mandatory in nature.

A bench of Justice Shekhar B. Saraf and Justice Vipin Chandra Dixit observed thus while allowing a writ plea filed by Gyanendra Kumar (dealer) challenging a show cause notice issued to him on September 8, 2023, with regard to an alleged discrepancy found in the joint inspection.

For context, Public Sector Oil Marketing Companies (OMCs) have formulated and implemented Marketing Discipline Guidelines (MDG) to check irregularities or malpractices at retail outlet (RO) dealerships.

It may be noted that OMCs’ officials periodically conduct regular or surprise inspections at the retail outlets to check for irregularities or malpractices, and action is taken per the Marketing Discipline Guidelines and the Dealership Agreement.

Now, in the instant case, the inspection by the respondent authorities was carried out on March 04, 2023, and the samples’ test came out on June 23, 2023; however, the respondent authorities sat over the sample tests for the period of two and half months and then issued a show cause notice only on September 09, 2023.

The petitioner moved the Court against it, as his counsel argued that the delay in issuing the notice violated clause 8.5.6 of the 2012 Guidelines.

For context, the said clause of the Marketing Discipline Guidelines, 2012, states explicitly that in cases where samples are taken during an inspection, the show cause notice must be issued within 30 days from the receipt of the test results.

The Court noted that it was an admitted fact that the samples were taken during the inspection, and a show cause notice had been issued after more than 2 months from the date of receipt of test results, despite the clear mandate of the guidelines regarding a 30-day time limit.

Thus, noting that clause 8.5.6 of the 2012 guidelines is mandatory and no proper explanation has been provided by the respondent authorities to indicate the reasons for such delay, the court quashed the said notice on the grounds of being issued with an inordinate delay.

The Court, however, granted liberty to the respondent authorities to conduct fresh inspection, draw samples, and act following the law. With this, the plea was disposed of.

Case title – Gyanendra Kumar vs. Union Of India And 7 Others 2025 LiveLaw (AB) 66

Case citation: 2025 LiveLaw (AB) 66

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