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2009 DIGILAW 212 (GAU)

Dilip Deka v. State of Assam

2009-03-26

BIPLAB KUMAR SHARMA

body2009
JUDGMENT B.K. Sharma, J. 1. All the writ petitions are on the same set of facts and the issue involved is also one and the same. Thus, the writ petitions have been heard analogously and are being disposed of by this common judgment and order. 2. Since the facts involved in all the writ petitions are more or less the same with certain variations, and as agreed to by the learned Counsel for the parties, the facts involved in WF(C) No. 3982/2006 are reflected in the judgment. 3. The Petitioners are aggrieved by Annexure-IX order dated 28.7.2006 by which the Respondent-Corporation communicated its decision to the Official Liquidator of the STATFED about the decision to discontinue the LPG supply to the STATFED distributors with effect from 1.8.2006. It will be pertinent to mention here that the STATFED itself is not aggrieved by the said order dated 28.7.2006 inasmuch as it has not filed any writ petition, but has only supported the case of the Petitioners. 4. The Petitioner in WP(C) No. 3982/2006 Sri Dilip is a contractor-cum-businessman. He claims that he has sound financial background. In paragraph 4 of the writ petition, it is the pleaded case of the Petitioner that the STATFED, due to lack of requisite resources could not operate the LPG branches entrusted to it by the I.O.C. and thus, the STATFED mooted the proposal for entrusting the agency of LPG dealership entrusted to it by the Indian Oil Corporation (IOC) to; the individuals with financial background. 5. In response to the aforesaid proposal allegedly mooted by the STATFED, the Petitioner responded to the same and the STATFED being satisfied with the proposal and financial status of the Petitioner, appointed the Petitioner as an agent vide, Memorandum of Understanding (MoU) dated 18.10.2004 for a period of 10 years with effect from the date of commission. 6. It is on the above basis, the Petitioner used to run the LPG dealership, which was admittedly given only to the STATFED which has since gone on liquidation. 7. After the STATFED has gone on liquidation with effect from 14.6.2006, the Official Liquidator i.e., the Respondent No. 4 has been appointed to look after the affairs of the STATFED. With the cancellation of registration of the STATFED, the Respondent-Corporation took the conscious decision to discontinue the LPG supply to all the STATFED distributors with effect from 1.8.2006. 7. After the STATFED has gone on liquidation with effect from 14.6.2006, the Official Liquidator i.e., the Respondent No. 4 has been appointed to look after the affairs of the STATFED. With the cancellation of registration of the STATFED, the Respondent-Corporation took the conscious decision to discontinue the LPG supply to all the STATFED distributors with effect from 1.8.2006. Referring to the minutes of the meeting held on 26.6.2006 between the Respondent-Corporation and the liquidated-STATFED, it is the case of the Petitioner that as per the said minutes of discussion, the Corporation ought to have continued the LPG supplies to the Petitioner(s). 8. While it is the case of the Petitioners that they have been running the STATFED LPG Distributorship as agents of the STATFED pursuant to the Annexure-I MoU dated 18.10.2004, it is the case of the Respondent-Corporation that such MoU could not have been entered into by and between the parties keeping the Respondent-Corporation in dark. Further stand of the Respondent Corporation is that the letter of intent (LOI) issued to the STATFED was materialized with the execution of the agreement dated 27.10.2005. Such agreement was executed with the STATFED by the Respondent-Corporation with the clear understanding in Clause 21 that the distributor i.e., the STATFED shall not sell, assign, mortgage and/or part with it or otherwise transfer its interest to any third party. In other words, it is the case of the Respondent-Corporation that since the distributorship was in favour of the STATFED for different places, the STATFED could not have entered into an independent agreement and/or MoU with the Petitioner(s) so as to entrust the distributorship itself to be run by them. According to the Respondent-Corporation, such conduct of the STATFED has violated Clause 23(c) of the agreement dated 27.10.2005 which provides that the distributors shall not enter into any agreement, contract or understanding whereby the operations of the distributorship may be controlled/carried out and/or financed by any other person, firm and company whether directly or indirectly and whether in whole or part. 9. 9. It appears that although the writ petitions are founded only on the premises that in view of the various discussions that took place between the IOC and the authorities of the STATFED and the Government of Assam regarding running of the LPG distributorships pursuant to cancellation of the registration of the STATFED, but in course of time, the Petitioners have filed number of affidavits, projecting some other grounds, not incorporated in the writ petitions. 10. The STATFED and the State Government in their counter-affidavits have supported the case of the Petitioners. According to them, although registration of the STATFED has been cancelled, but since the affairs of the STATFED are being by the Respondent No. 4 i.e., the Liquidator, there is no impediment to continue the LPG distributorship and/or supplies to all the STATFED distributors through the Petitioners. 11. Mr. A. Sarma, learned Counsel for the Petitioners has strenuously argued that in view of the fact that the Petitioners were appointed as managing agents of the STATFED, merely because the registration of the STATFED has been cancelled, the Respondent-Corporation cannot deny the Petitioners to carry on the business of the LPG distributorships. According to him, the stoppage of the LPG supply by the Respondent-Corporation is actuated by mala fide, exercise of power. Referring to Sections 65 and 66 of the Assam Co-operative Societies Act, 1949, he has contended that irrespective of cancellation of the registration, the Respondent-Corporation is duty beyond to continue to supply LPG Cylinders to the Petitioners. 12. Mr. B.J. Talukdar, learned State counsel, upon a reference to the counter-affidavit filed by the State Respondents, submits that since the LPG supply is an essential supply, the Respondent-Corporation ought to have continued such supply to the Petitioners irrespective of cancellation of registration. He submits that since the STATFED is under the deemed and pervasive control of the Official Liquidator, there is no impediment to supply LPG Cylinders to the Petitioners so as to distribute the same among the customers. 13. Mr. A.M. Bujarbaruah, learned Counsel for the Respondent No. 4 i.e., the Liquidator of the STATFED, has strenuously argued that the very action on the part of the Respondent-Corporation is not a bona fide exercise of power. 13. Mr. A.M. Bujarbaruah, learned Counsel for the Respondent No. 4 i.e., the Liquidator of the STATFED, has strenuously argued that the very action on the part of the Respondent-Corporation is not a bona fide exercise of power. He submits that since the Petitioner(s) entered into memorandum of understanding with the STATFED even before the agreement dated 27.10.2005 came into being between the Respondent-Corporation and the STATFED, the particular Clause in the said, agreement which debars transfer, assignment, mortgage etc of the LPG distributorship with a third-party will not be applicable in the instant case. 14. The matter was heard on 24.3.2009 and was adjourned to this day on the request of Mr. Sarma, learned Counsel for the Petitioners. However, while Mr. Sarma, learned Counsel for the Petitioners could not furnish any further instructions, the Respondent No. 4 i.e., the STATFED taking advantage of such adjournment granted, has filed an affidavit on 26.3.2009 bringing some more materials. The affidavit has been filed primarily to show that the Petitioners are the members of the STATFED and thus, have locus standi to run the distributorships on behalf of the STATFED and consequently, also to file writ petitions. 15. According to the aforesaid affidavit, the Respondent-Corporation was aware of the fact that the STATFED has already entered into agreements with the Petitioners to run the LPG distributorship. Referring to the aforesaid, Mr. Bujarbaruah, learned Counsel for the Respondent No. 4 has argued that since the Petitioners are the members of the STATFED and the MoU was signed on 18.10.2004, much before the agreement between the Corporation and the STATFED, which is dated 27.10.2005, there was nothing wrong in entrusting the distributorships to the Petitioners. He has also referred to the aforementioned provisions of the Act to which Mr. Sarma, learned Counsel for the Petitioners has referred to. 16. Countering the above arguments advanced by the learned Counsel for the Petitioners and the concerned Respondents, Mr. M.K. Choudhury, learned Sr. counsel assisted by Mr. M. Dutta, learned Counsel for the Respondent-Corporation, submits that it is a clear case or violation of the agreements arrived at by and between the Respondent-Corporation and the STATFED. He submits that till filing of the writ petition it was not within the knowledge of the Respondent-Corporation that the LPG distributorship was let out to the Petitioners. M. Dutta, learned Counsel for the Respondent-Corporation, submits that it is a clear case or violation of the agreements arrived at by and between the Respondent-Corporation and the STATFED. He submits that till filing of the writ petition it was not within the knowledge of the Respondent-Corporation that the LPG distributorship was let out to the Petitioners. He submits that the distributorship was granted in favour of the STATFED and not to any individual, like that of the Petitioners. He further submits that throughout the writ petition, there is not even a whisper that the Petitioners are the members of the STATFED, cooperative society. According to him, even if the Petitioners are stated to be the members of the STATFED that by itself will not create any right in their favour to run the distributorship taking the agency of the STATFED. AS regards the stoppage of supply of LPG, he submits that since the STATFED has gone on liquidation and the registration itself has been cancelled, the distributorships have automatically come to an end, there is no question of continuation of the LPG supplies and that too, through the Petitioners with whom there was no agreement. 17. I have considered the submissions made by the learned Counsel for the parties and the materials on record. I have given my anxious consideration to the same. It is an admitted position that the Respondent-Corporation issued the letter of Intent (IOI) in favour of the STATFED only and not to the Petitioners. Thereafter, the MoU was signed by and between the parties on 27.10.2005 incorporating various Clauses, one of which, as noted above, is regarding the bar of transfer, assignment, sell, mortgage etc. by the STATFED in favour of any third-party in respect of the LPG distributorship. Clause 23(c) of the agreement provides that the distributor shall not enter into any agreement, contract or understanding whereby the operations of distributorship may be controlled/carried out and/or financed by any other person, firm and/or company. 18. It was never brought to the notice of the Respondent-Corporation by the STATFED at the time of execution of the agreement dated 27.10.2005 that it has already entered into agreement with a third-party to run the distributorship. 18. It was never brought to the notice of the Respondent-Corporation by the STATFED at the time of execution of the agreement dated 27.10.2005 that it has already entered into agreement with a third-party to run the distributorship. It is not understood as to how the STATFED could have entered into the MoU one year before i.e., on 18.10.2004, before the agreement dated 27.10.2005 by which only LPG distributorship was entrusted to the STATFED. 19. Although it was the argument of the learned Counsel for the Petitioners, as well as the STATFED that the only bar being not to transfer, assign or mortgage or enter into an agreement in respect of the running of the distributorship, only after the agreement between the Corporation and the STATFED was signed, but by virtue of the MoU between the Petitioners and the STATFED which was executed much prior to the said agreement, the particular Clauses in the agreement dated 27.10.2005 will not be applicable to the case in hand, but I am afraid, such an argument is totally misplaced. The particular Clause in the agreement dated 27.10.2005 between the Corporation and the STATFED will have to be understood in the context in which the agreement was arrived at and signed. The sole intention of the Corporation was that it is the STATFED which would run the LPG distributorship and thus, the third-party agreement was totally barred. It was incumbent on the part of the STATFED to disclose that it had arrived at an MoU with a third party i.e., the Petitioners even before the execution of the agreement with the Corporation on 27.10.2005. The particular Clause in the agreement dated 27.10.2005 will have to be understood on the touchstone of the scheme of the agreement. 20. The LOI was issued in favour of the STATFED and thereafter, the agreement was arrived at on 27.10.2005. It was never the intention of the Respondent-Corporation that the STATFED would be at liberty to appoint any other third party to run the affairs of the distributorship. The agreement was bilateral and binding on the parties. It does not lie on the mouth of the STATFED to say that since the MoU with the Petitioners was executed much before the agreement with the Corporation, the Clauses in the agreement with the Corporation will not be binding on the STATFED. 21. The agreement was bilateral and binding on the parties. It does not lie on the mouth of the STATFED to say that since the MoU with the Petitioners was executed much before the agreement with the Corporation, the Clauses in the agreement with the Corporation will not be binding on the STATFED. 21. As per the aforesaid bipartite agreement dated 27.10.2005, the responsibility towards smooth running and functioning of the LPG distributorship lies with the STATFED. On being asked as to whether such liability would bind the Petitioners as well, the argument was that in view of the earlier MoU between the STATFED and the Petitioners, the liability will also remain with the Petitioners. Such stand, in my considered opinion, is totally absurd. The Respondent-Corporation entered into the agreement on 27.10.2005 with the STATFED only and not with any other (Petitioner). In case of mismanagement of the LPG distributorship and violation of the Clauses in the agreement to the detriment of the interest of the Corporation and for that matter, the public, the liability will be fastened on the STATFED and not on the Petitioners, who are strangers to the agreement. 22. There being violation of the terms and conditions of the agreement dated 27.10.2005, the Respondent-Corporation is within its competence and jurisdiction to terminate the LPG distributorship with the STATFED. Even otherwise also, since the registration of the STATFED has been cancelled, the Respondent-Corporation is wholly within its competence and jurisdiction to discontinue the LPG supply to the STATFED. When it has come to the notice that the STATFED has violated the terms and conditions of the agreement dated 27.10.2005 by entrusting the distributorship to a third party i.e., the Petitioners, this Court cannot give further indulgence to the same accepting the argument that the Petitioners are mere agents of the STATFED and thus, they are entitled to run the distributorship." The agreement between the Respondent-Corporation and the STATFED is binding on the STATFED. The STATFED has not made any grievance against the impugned decision of the Respondent-Corporation, but has only collaterally challenged the said decision in their counter-affidavit filed in the writ petition. The agreement having been entered into by the Corporation with the STATFED, the impugned decision dated 28.7.2006 thereof can only affect the STATFED and not the Petitioners. However, the STATFED is not aggrieved by the said decision conveyed by the impugned order letter dated 28.7.2006. The agreement having been entered into by the Corporation with the STATFED, the impugned decision dated 28.7.2006 thereof can only affect the STATFED and not the Petitioners. However, the STATFED is not aggrieved by the said decision conveyed by the impugned order letter dated 28.7.2006. 23. The Respondent-Corporation by its letter dated 4.8.2006 (Annexure-XHI to the writ petition) conveyed to the Respondent No. 4 i.e., the Liquidator pointing out that the LPG distributorship can be operated by the authorized persons only and involvement of any third party or agent in ownership/direct operation of the distributorship will tantamount to benami operation and will make them liable for severe action including termination. In the instant case, there is no manner of doubt that the STATFED has clearly violated the agreement dated 27.10.2005 and thereby has attracted itself to the penal action. Apart from that, when its registration itself has been cancelled, the Respondent-Corporation is within its jurisdiction to take the decision to stop LPG supply to all the STATFED distributors. 24. In view of the aforesaid position, the Petitioners, who are strangers to the agreement dated 27.10.2005 have no locus standi to file the writ petitions. The entire action of the Respondent-Corporation as against the STATFED. Firstly, the LPG supply has been stopped in view of the cancellation of the' registration of the STATFED. Secondly, it has been conveyed that the Respondent-Corporation, having regard to the violation of the terms and conditions of the agreement dated 27.10.2005, the distributorship with the STATFED is liable to be terminated. But the STATFED is not aggrieved by the said decision. They have not filed any writ petition, but it is the Petitioners who on the basis of the agreement with the STATFED have projected themselves to be the persons aggrieved. In my view, it is totally misconceived. The Petitioners having had no locus standi, to file the writ petitions, they are not entitled to any relief. 25. For all the aforesaid reasons, all other grounds urged by the Petitioners and the STATFED fall through and consequently, the writ petitions are dismissed. There shall be no order as to costs. Petition dismissed