Research › Search › Judgment

Calcutta High Court · body

2012 DIGILAW 576 (CAL)

Niwas Ramgopal v. Director of Consumer Goods

2012-07-03

TAPEN SEN

body2012
Judgment :- Tapen Sen, J. 1. In this Writ Petition, the Petitioners pray for a Declaration declaring that Clause 1.5 of the Policy Guidelines dated 1.12.2008 (page 87 of the Writ Petition) be declared to be contrary to the provisions of the Indian Partnership Act, 1932 (hereinafter referred to as the 1932 Act) The Petitioners further pray for the issuance of a writ of mandamus Directing the Respondent Nos. 1 and 2 to renew the licence of the Petitioner No. 1 under the West Bengal Kerosene Control Order 1968. They further pray that the Respondent Nos. 4 to 7 be Directed to allow the reconstitution of the Firm (Petitioner NO. 1) in terms of the Partnership Deed dated 24.11.1989 (Annexure-P/1). The Petitioners further pray that the Respondents be Directed to extend the validity of the Token which was issued against their Application for renewal of the licence. They have also prayed that these Respondents be restrained from refusing to supply Kerosene Oil after 14th June, 2010 and allow them to continue with their business till reconstitution of the Firm. 2. The facts of this case are that the Petitioner No. 1 (M/s. Shree Niwas Ramgopal) was a Partnership firm of one Kanhaiyalal Santhalia (now deceased) and it was engaged in the business of Kerosene. It was appointed as a Dealer by M/s. Indian Oil Corporation Ltd. Subsequently, Kanhaiyalal Santhalia inducted the Petitioner Nos. 2 and 3 (Gobind Santhalia and Ramesh Santhalia) as partners on the basis of a Partnership Deed dated 24.11.1989 which was approved by the oil Company by its letter dated 8.6.1990. 3. It is stated that the partners of the Petitioner No. 1 entered into an Agreement with M/s. Indian Oil Corporation Ltd. for dealing with the business of Kerosene Dealershipin Dhulian, Murshidabad, West Bengal vide Annexure-P/2. They obtained necessary licences including licence No. AGT/Jangi/190 under the West Bengal Kerosene Control Order, 1968 (Anenxure-P/3). 4. The said licence expires on the 31st day of December each year and before its expiry, an Application in Form-C is required to be made. The Petitioners got their licence renewed each year till 31st December, 2009. However before the expiry of the licence in December 2009, the Petitioners also filed an Application for renewal for the year 2010. However, before the licence could be renewed for 2010, the father of the Petitioner Nos. 2 and 3 died on 29.11.2009. The Petitioners got their licence renewed each year till 31st December, 2009. However before the expiry of the licence in December 2009, the Petitioners also filed an Application for renewal for the year 2010. However, before the licence could be renewed for 2010, the father of the Petitioner Nos. 2 and 3 died on 29.11.2009. Information was given to the Respondents by two separate letters both of which were dated 30.11.2009 (Annexure-P/4) collectively. 5. It is stated that upon receipt of a letter, the Respondent No. 2 (Joint Director, Consumer goods) informed the Petitioner No. 1, by his letter dated 7.12.2009, that the Respondent No. 1 (Director of Consumer Goods) had allowed the functioning of the business till 31st March, 2010. This letter of the Respondent No. 2 has been brought on record vide Annexure -P/5. 6. It has been stated that upon the death of one of the partners, the Agreement between Indian Oil Corporation Ltd. was required to be executed afresh. However, till execution of a fresh Agreement , and as advised by the Chief Divisional Retail Sales Manager (Respondent No. 5), a Bond by the surviving partners was submitted by forwarding letter dated 15.12.2009 and after acceptance of the said Indemnity Bond, the Respondent No. 4 (Indian Oil Corporation Ltd.) allowed the Petitioner No. 1 (the Partnership firm) to continue to function with the surviving partners. Annexure P/6 is the letter sent by the Petitioners to the Chief Divisional Retail Sales Manager on 15.12.2009. It is stated that on 16.12.2009, the Petitioner No. 2 was handed over a Token dated 16.12.2009 for carrying on the business till 31st March, 2009 and the Petitioners were directed to submit a new Dealership Agreement as well as a new Partnership Deed. It is stated that the validity of the Token was subsequently extended till 14.6.2010. 7. On 16th January, 2010 (Annexure-P/8), the Petitioner Nos. 2 and 3 wrote a letter to the other legal heirs requesting them to attend a meeting on 24.1.2010 for steps to be taken for reconstitution of the Firm and for other discussions. On 19th January, 2010, one of the legal heirs, Ananda Sonthalia (Respondent No. 10) sent a letter to the Petitioner Nos. 2 and 3 wherein he staked a claim in the Partnership and that he be inducted as a partner with equal share on proportionate basis. This letter is Annexure-P/9. 8. On 19th January, 2010, one of the legal heirs, Ananda Sonthalia (Respondent No. 10) sent a letter to the Petitioner Nos. 2 and 3 wherein he staked a claim in the Partnership and that he be inducted as a partner with equal share on proportionate basis. This letter is Annexure-P/9. 8. An undated letter marked P-10 of one Jagdishprasad Sonthalia (being another legal heir) was also received by the Petitioners. He stated that because of his bitter experience during the last two decades, he had no knowledge about the assets and liabilities of his deceased father and therefore, he requested the Petitioner Nos. 2 and 3 to furnish the details of the assets and liabilities so that he could take a proper decision in due course of time. He also stated that since he would be out of station, he would not be able to attend the meeting and requested for another date in March, 2010. 9. It appears that another legal heir, being Rakesh Sonthalia (Respondent No. 9) sent a letter directly to the Chief Divisional Retail Sales Manager (Respondent No. 5) on 7.2.2010 wherein he stated that his father, Late Kanhaiyalal Sonthalia, had made a Will on 28.5.2008 desiring that he should be a Partner after his death of 55% share in the Firm. A copy of the Will was enclosed with the said letter. This letter is Annexure-P/11. It appears that thereafter, on 15th February, 2010 the Petitioner Nos. 2 and 3 informed the other legal heirs that the meeting would be held on 14.3.2010. Subsequently, by letter dated 24.2.2010, the Petitioner Nos. 2 and 3 were served with a legal notice informing them that Late Kanhailal Sonthalia had bequeathed his entire 55% share to Rakesh Sonthalia on the basis of registered Will dated 28.5.2008 and therefore, he was a legatee of the entire share of Late Kanhaiyalal Sonthalia as per the Will and was also the Executor thereof. It was also stated that after the death of Kanhaiyalal Sonthalia, Rakesh Sonthalia had already applied for Probate which was registered as Misc. Case No. 11/2010 – Probate in the Court of the Civil Judge, Junior Division at Jangipur. 10. It was further intimated that under such conditions, the Petitioner Nos. 2 and 3 had no authority to take any steps with regard to reconstruction of the Partnership business or hold other discussions in the matter. Case No. 11/2010 – Probate in the Court of the Civil Judge, Junior Division at Jangipur. 10. It was further intimated that under such conditions, the Petitioner Nos. 2 and 3 had no authority to take any steps with regard to reconstruction of the Partnership business or hold other discussions in the matter. The legal notice was stated that if any action is taken prior to the conclusion of the Probate proceedings, it will be deemed to be illegal making the Petitioner Nos. 2 and 3 open to criminal as well as civil liabilities. According to the Petitioners, M/s. Indian Oil Corporation, by its letter dated 2.3.2010 (Annexure-P/15), refused to take cognizance of the letters of Rakesh and Anand Sonthalia and thereafter, on 8.3.2010, Anand Sonthalia sent a letter to the Petitioner Nos. 2 and 3 putting in his claim in the Partnership also. 11. In the meantime, on 12.3.2010, the Assistant Manager (Respondent No. 7) informed the Petitioner No. 1 that the Company had approved the continuation of the operation of the firm till 14th June, 2010 and had advised them to submit document for reconstitution of the firm. Thereafter, the Petitioner Nos. 2 and 3 submitted their proposal on 13.4.2010 praying for reconstitution of the firm with the surviving partners and one other legal heir, being Bijoy Sonthalia, and enclosed all necessary documents along with a Demand Draft of Rs. 25,000/-as reconstitution fee. 12. The Petitioners have stated that they had expected that the licensing authority would extend the validity of the Token or issue a renewed licence but they were told that the validity of the Token will be extended only if the Oil Company executed a fresh Agreement or allowed continuation of the firm beyond 14.6.2010. The Petitioner No. 2 sent a representation requesting him for continuation of supplies vide Annexure-P/19 but since no reply was received from the Oil Company, another similar prayer was made on 28.5.2010 with a prayer for maintaining continuity of supply with a fresh Indemnity Bond. 13. The grievance of the Petitioners is that the Respondents have illegally not extended the validity of the Token. According to them, Clause 1.5 of their Policy dated 1.12.2008 is contrary to the provisions of the Indian Partnership Act. 14. Mr. 13. The grievance of the Petitioners is that the Respondents have illegally not extended the validity of the Token. According to them, Clause 1.5 of their Policy dated 1.12.2008 is contrary to the provisions of the Indian Partnership Act. 14. Mr. L.C. Behani, learned Senior Counsel appearing for the Petitioners, had drawn the attention of this Court to Clause 18 of the Agreement which states that “Death of any of the partners shall not cause discontinuance of the Partnership business and the survivor or survivors may continue the business and the interest of deceased in the net assets of the firm shall vest in his legal heirs and the surviving partners may admit any of the competent heirs of the deceased to the Partnership on such terms and conditions as may be agreed upon.” 15. Anand Sonthalia was added as a party Respondent No. 10. He has submitted that if any Order is passed by this Court, it would render the Probate Proceedings infructuous and would also make the Will meaningless. The Respondent No. 9, Rakesh Sonthalia has also filed an Affidavit-in-opposition and in para 18, he has stated as follows: “18. That with regard to the statements made in paragraph no. 22, I deny and dispute the contention made therein save and except what are matter of record. I categorically state that from bare perusal of the document as annexed as Annexure-P-18, the same cannot termed to be an application for reconstruction of the firm. The firm was initially included three partners namely Kanhailal Santholia, having 55% share in the business, Ramesh Santholia, having 35% share in the business and Gobinda Santholia, having 10% share in the business. In the event, there is the death of any of the partners, the legal heirs of the deceased would be substituted and there would be reconstruction of the partnership firm. Here in this case in the name of reconstitution of the firm, the petitioner No. 2 and 3 purposefully and motivatedly brought about new firm in the same name and this was done purposefully and with specific intention for which Rs. Here in this case in the name of reconstitution of the firm, the petitioner No. 2 and 3 purposefully and motivatedly brought about new firm in the same name and this was done purposefully and with specific intention for which Rs. 25,000/-was paid as reconstitution fee which would not have been required in the event of reconstitution of the firm in the event of death of any of the partners by taking this application the petitioner No. 2 and 3 practically snatched away the legal right of the legal heirs of Late Kanhaiyalal Santholia. Moreover, as it appears from the documents as annexed to as Annexure P-18 that in the said purported document Sri Vijoy Santholia was projected as one of the proposed shareholder in the proposed business. It is important to mention in this connection that Sri Vijoy Santholia by no stretch of imagination can be partner in the business with the Indian Oil Corporation since a criminal case against him is pending before the learned Additional Chief Judicial Magistrate, Jangipur being NGR No. 522/04/TR No. 613 of 2004. The photocopy of the said document is enclosed herewith and marked as Annexure R-1. However, the authorities in a subsequent communication refused to entertain the said application by means of a separate letter dated 11th June, 2010 which was forwarded to all the legal heirs. This subsequent communication has practically made the instant writ petition infructuous and hence this writ petition should be dismissed summarily. This letter is also enclosed herewith and marked as Annexure R-2”. (Quoted) 16. Learned Counsel for the Petitioners has strongly relied upon an earlier judgment of this case W.P. 1240 of 2010 (M/s. Roy and Company Vs. State of West Bengal & Ors.). 17. Mr. M.S. Yadav, learned Counsel appearing for the Oil Company has submitted that even if this case is covered by the Judgment of W.P. 1240 of 2010, yet that judgment has not set aside Clause 1.5 of the Policy and therefore, the said Clause remains valid. Consequently, the said Policy cannot be rendered meaningless. 18. Having considered the rival submissions of the parties this Court is however of the view that the case at hand is squarely covered by the aforementioned judgment. The facts remains that there was a Partnership Firm of the Petitioner No. 1 in which the Petitioner Nos. Consequently, the said Policy cannot be rendered meaningless. 18. Having considered the rival submissions of the parties this Court is however of the view that the case at hand is squarely covered by the aforementioned judgment. The facts remains that there was a Partnership Firm of the Petitioner No. 1 in which the Petitioner Nos. 2 and 3 and the deceased Kanhaiyalal Sonthalia were the ONLY partners. Now, because of the death of one of them, others have sprung up suddenly on the scene claiming partnership and creating a dispute. Such a scenario existed in Roy & Company’s case also. Now Clause 18 of the instant Partnership Deed clearly records that the death of the any partners shall not cause discontinuance of the Partnership. At the same time, we cannot also lose track of the fact that there are persons listed by the Petitioner Nos. 2 and 3 themselves vide Anenxure-P/8 (letter dated 16.1.2010) admitting that they are also legal heirs. However, a Partnership Deed has to be reckoned in terms of the Partnership Act and Clause 18, if construed, will not mean that the Partnership itself should be terminated merely because one of the partners had died. Let it be recorded further that the Partnership Deed was not only acted upon but it was recognized by Indian Oil Corporation themselves and therefore, they cannot be allowed to render the said Partnership Deed infructuous on the basis of a Policy Guideline which says that in the case of death of one of the partners, the Partnership shall be reconstituted with the legal heirs and the surviving partners. These terms in the Policy cannot be allowed to mean that even strangers to the Deed/Agreement and those who were not even parties to the Dealership Agreement or to the Deed of Partnership must firstly be satisfied for the constitution of the Dealership Agreement. This court has already held in the aforesaid similar case of M/s. Roy and Company & Ors. that if other legal heirs want to be inducted as partners, then they must first get their title perfected through a properly constituted civil suit before an appropriate court of civil jurisdiction but the Indian Oil Corporation cannot insist that a stranger/strangers to the Partnership Deed must also be a part of a reconstituted Partnership. 19. that if other legal heirs want to be inducted as partners, then they must first get their title perfected through a properly constituted civil suit before an appropriate court of civil jurisdiction but the Indian Oil Corporation cannot insist that a stranger/strangers to the Partnership Deed must also be a part of a reconstituted Partnership. 19. Since the facts of this case are similar to the case of M/s. Roy and Company & Ors. supra, it is not necessary for this Court to deal with the other submissions. 20. Accordingly the Writ Petition is allowed holding that the Indian Oil Corporation Ltd. cannot refuse to renew the licence of the Petitioner No. 1 issued under the 1968 Control Order nor can they refuse to allow the reconstitution of the Partnership Firm of the Petitioner No. 1 at this stage. 21. The Writ Petition is accordingly allowed directing the Indian Oil Corporation to allow the reconstitution of the Partnership Firm of the Petitioner No. 1 subject to any order that may be passed either in the Probate Proceedings or subject to any Order that may be passed by a competent Court of civil jurisdiction in the event the other legal heirs move such a Court for getting their title/titles perfected. They, including the Respondent Nos. 9 and 10, are therefore given full liberty to get their rights declared and titles perfected through a duly constituted Civil Suit and if they succeed, then and only then, they would be entitled to claim induction including reconstitution of the firm in accordance with law but till their rights are not so declared and till their titles are not so perfected by a Decree in which, all the heirs of Late Kanhailal Sonthalia are parties, this Partnership/the subject matter of this Writ Petition, cannot be allowed to become defunct. The Writ Petition is accordingly allowed with the aforesaid observations and discussions. As a consequence of this Order, GA No. 2914 of 2010 will be deemed to have been disposed of.