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2012 DIGILAW 460 (ORI)

Dwarsuni Filling Station v. Indian Oil Corporation Ltd. , Bhubaneswar

2012-10-16

B.K.MISRA, V.GOPALA GOWDA

body2012
JUDGMENT B.K. MISRA, J. 1. The petitioners in this writ petition have prayed for quashing of the order (Annexure-1) of termination of their dealership agreement. They have also prayed for a direction to the opposite party no.1 Corporation to supply petroleum products for smooth running of the Petitioner No.1 Firm. 2. According to the case of the petitioners the Petitioner No.1 Firm was constituted in the year, 1982 having two partners, namely, the Petitioner No.2 Sri Manoranjan Mohapatra and Sri Manoranjan Panda. The said Manoranjan Panda resigned within two to three months of running of the petrol pump i.e. the Petitioner No.1 Firm. Accordingly, the retail outlet started functioning as a sole proprietorship concern under the management of Petitioner No.2 which was duly approved by the Opposite Party No.1 Corporation. It is the further case of the petitioners that the Petitioner No.2 joined as Assistant Tourist Officer in the Department of Tourism, Government of Odisha and accordingly, sent his letter of resignation to the Opposite Party No.2 on 30.4.1982 with a request to appoint his younger brother Sri Bijay Kumar, the present Petitioner No.3 as a proprietor of Petitioner No.1 Firm for running the business as per the terms and conditions of the Corporation. The said fact was also intimated to the State Government by Petitioner No.2. The Petitioner No.2 joined his post as Assistant Tourist Officer on 8.5.1982 and before that he had submitted his letter of resignation to Opposite Party No.1 under Annexure-2. But no decision was taken by the Corporation on that. The proposal for reorganization of retail outlet dealership was submitted to the Corporation on 17.6.1992 with a proposal to induct the Petitioner No.3 as a partner under Annexure-3. The said proposal was approved by the Corporation in the year 1993 and the Corporation also called for certain documents along with partnership deed for amendment of the statutory license of the business concern. Copy of the said letter of the Corporation is annexed to the writ petition as Annexure-4. Resultantly, the deed of partnership was executed in between Petitioner Nos.2 and 3 on 1.4.1993, copy of which was submitted to the Corporation. Copy of the said letter of the Corporation is annexed to the writ petition as Annexure-4. Resultantly, the deed of partnership was executed in between Petitioner Nos.2 and 3 on 1.4.1993, copy of which was submitted to the Corporation. It is the further case of the petitioners that despite several approaches for acceptance of resignation of Petitioner No.2, the Opposite Party No.1 Corporation did not take any action and accordingly under those compelling circumstances the agreement was executed on 11.9.1995 in between the Corporation and the Petitioner No.1 Firm and at that time also the Petitioner No.2 was not prohibited by the Corporation to sign the agreement. For smooth running of the petrol pump a proposal was submitted to induct Opposite Party No.4, Krushna Chandra Mohapatra as another partner in the year, 2001 which was approved by the Corporation. When internal problems cropped up in between the partners of Petitioner No.1, Firm the partnership deed could not be registered and therefore reorganization proposal could not be effected on account of non-submission of required documents. But the business of the Petitioner No.1 Firm was being carried out smoothly by the Petitioner No.3. It is the further case of the petitioners that when the staff of the Petitioner No.1 Firm in connivance with opposite party no.4 created problems, one F.I.R. was lodged which resulted in registration of G.R. Case No.46 of 2010 against Sri Ajay Kumar Dash, the Manager of the Petitioner No.1 Firm. It is the case of the petitioners that when Criminal Proceedings were pending, the Opposite Parties on 30.5.2010 arbitrarily stopped supply of petroleum products to the Petitioner No.1 Firm and despite several correspondences the Corporation did not resume supply to the retail outlet of Petitioner No.1 Firm which is located at Bisoi. The petitioners on enquiry could come to know that opposite party no.4 had clandestinely submitted one unregistered partnership deed with an ulterior motive for which the Corporation stopped supplying the petroleum products to Petitioner No.1 and ultimately served a show cause on the Petitioner Firm on 5.1.2011 under Annexure-13 and ultimately the dealership of the Petitioner No.1 Firm was cancelled which was intimated to the petitioners under Annexure-1. Challenging the said unilateral and illegal action of the Opposite Party Nos.1 to 3, the petitioners have approached this Court for the aforementioned reliefs. 3. Challenging the said unilateral and illegal action of the Opposite Party Nos.1 to 3, the petitioners have approached this Court for the aforementioned reliefs. 3. The opposite party nos.1 to 3 have filed their counter affidavit wherein they have admitted the running of the Petitioner No.1 Firm since 1982. According to opposite party nos.1 to 3 the dealership of Petitioner No.1 Firm was terminated after affording reasonable opportunity to the petitioners to file their show cause and such dealership agreement was terminated for violation of the terms and conditions of the dealership agreement dated 11.9.1995, 11.11.20005/7.3.2006. It is also their specific case that they received allegations against the Petitioner No.2 from the M.L.A., Baripada. The Indian Oil Corporation Vigilance Department also received a complaint that the Petitioner No.2 is working as a Tourist Officer in the department of Tourism and Culture and after ascertaining the matter from the Government of Odisha in the Department of Tourism and Culture and finding substance in the said allegation and having been satisfied that the Petitioner No.2 had signed the dealership agreement dated 11.9.1995 and 11.11.2005/7.3.2006 and the Petitioners illegally inducted opposite party no.4 as Managing Partner to operate the retail outlet without the prior consent of the Corporation, terminated the dealership agreement. They also denied to have received any intimation from Petitioner No. 2 to have resigned from the partnership firm in question. It is the further stand of the opposite party nos.2 and 3 that in a proceeding under Article 226 of the Constitution of India the petitioners have no legal right to enforce a contractual obligations and besides that when the agreement provides an alternative remedy to the dispute by way of arbitration, the petitioners have no right to invoke the extra-ordinary jurisdiction under Article 226 of the Constitution of India. It was also their case that since the order of termination of the dealership agreement is in consonance with due observance of the principles of natural justice and fair play, the writ petition being devoid of merit should be dismissed with cost. 4. The petitioners have filed their rejoinder affidavit to the counter filed by the Opposite Party Nos.1 to 3. 4. The petitioners have filed their rejoinder affidavit to the counter filed by the Opposite Party Nos.1 to 3. From the materials which have been placed before us it becomes crystal clear that the Petitioner No.1 Firm is a partnership firm and was regularly receiving petroleum products from the Indian Oil Corporation i.e. Opposite Party No.1 Corporation till 30.5.2010. It is also an undisputed fact that the Petitioner No.1 Firm started its business since 1982 and the Petitioner Nos.2 & 3 were the partners of Petitioner No.1 Firm. The Opposite Party Nos.1 to 3 have admitted in their counter affidavit about the partnership agreement which was in existence till it was terminated on 4.7.2011. The record shows that under Annexure-13 a show cause notice was sent to the petitioners about the proposed termination of the dealership of M/s. Dwarsuni Filling Station, Bisoi because of violation of various clauses of the dealership agreement and especially when the Petitioner No.2 joined O.T.D.C. as a Tourist Officer under the Government of Odisha. Admittedly, the Petitioner No.3 under Annexure-14 had furnished his show cause which the Opposite Party Nos.1 to 3 admits but ultimately the Opposite Party No.1 Corporation terminated the dealership of Petitioner No.1 Firm. It was brought to our notice that the Petitioner No.2 had intimated Opposite Party No.2 vide his letter dated 30.4.1982 (Annexure-2) intimating his joining the Government service as Assistant Tourist Officer and to appoint his younger brother, namely, the Petitioner No.3 as partner of Petitioner No.1 Firm. Annexure-3 dated 17.6.1992 is also on the same line. Annexure-4 shows that the Opposite Party Corporation accepted the proposal for reconstitution of the dealership firm in favour of Petitioner Nos.2 & 3 and solicited some more papers and information. Thus, Annexure-4 the letter of the Corporation dated 25.2.1993 throws sufficient credence to the plea of the petitioners that the Opposite Party No.1 Corporation had been intimated by the Petitioner No.2 of his joining the Government service and in his place to induct Petitioner No.3 as dealer in respect of Petitioner No.1 Firm. Annexures-7, 8 and 9 show that Petitioner No.2 had requested the Opposite Party No.2 to accept his resignation from the dealership firm i.e. Petitioner No.1 Firm and Annexure-9 was received in the office of the Opposite Party No.2 on 5th May, 2010 which is apparent from the seal affixed to the said letter. Annexures-7, 8 and 9 show that Petitioner No.2 had requested the Opposite Party No.2 to accept his resignation from the dealership firm i.e. Petitioner No.1 Firm and Annexure-9 was received in the office of the Opposite Party No.2 on 5th May, 2010 which is apparent from the seal affixed to the said letter. Thus, we are at a loss to understand as to how the Opposite Party Nos.1 to 3 denied to have received any letter from the Petitioner No.2 intimating them to have resigned from the Partnership Firm and to induct Petitioner No.3 in his place. In Annexure-14 the Petitioner No.3 has prayed to Opposite Party No.2 while furnishing show cause to make further submissions and to submit the relevant papers and documents to substantiate his grievance in addition to what he has stated in his show cause reply dated 4.2.2011 under Annexure-14. The materials on record and the Annexure-1 nowhere reveals that before passing the order of termination of the dealership, any opportunity had been given to the petitioners much less the Petitioner No.3 of being heard in the matter though Petitioner No.3 under Annexure-14 had prayed the Opposite Party No.2 to provide him opportunity as he has reserved his right to make further submission and to submit the relevant papers and documents. The termination letter under Annexure-1 reveals that such order was passed on the basis of the reply of Petitioner Nos.2 and 3 only which were found to be unsatisfactory by the competent authority but it does not show if any personal hearing was given to the Petitioner No.3 or Petitioner No.1 Firm before taking the extreme steps in terminating the dealership firm which was in existence since 1982 till it was terminated under Annexure-1 dated 4.7.2011. Thus, we have no hesitation in our mind to hold that such dealership of Petitioner No.1 Firm was terminated by the Corporation (Opp. Party No.1) in violation of the principles of natural justice of not having afforded reasonable opportunity to Petitioner Nos.1 and 3 of being heard before taking the unilateral action. 5. Thus, we have no hesitation in our mind to hold that such dealership of Petitioner No.1 Firm was terminated by the Corporation (Opp. Party No.1) in violation of the principles of natural justice of not having afforded reasonable opportunity to Petitioner Nos.1 and 3 of being heard before taking the unilateral action. 5. Without going to the arbitration points which the opposite parties have raised in their counter affidavit as well as in course of hearing, we leave the said matter open as sufficient materials are there on record to show that the termination of dealership of Petitioner No.1 Firm under Annexure-1 cannot be sustained in the eye of law as the same has been passed without application of mind and without following the principles of natural justice by depriving the Petitioner No.1 Firm and Petitioner No.3 of being heard. 6. Resultantly, while quashing the cancellation of the dealership order under Annexure-1, we direct Opposite Party Nos.1 to 3 to reconsider the matter afresh by affording reasonable opportunity to the petitioners of being heard whereafter they would be free to pass appropriate orders with reference to the materials so placed before them. Accordingly, the writ petition stands disposed of with the aforesaid observation. I agree.