A. Jose Antony v. Deputy General Manager (I/C) LPG Indian Oil Corporation Ltd.
2015-10-08
R.SUBBIAH
body2015
DigiLaw.ai
ORDER : This writ petition has been filed by the petitioner seeking to quash the impugned order dated 27.07.2015 in Ref.TNL/S/218 dated 27.07.2015 passed by the 1st respondent terminating the Distributorship Agreement of the petitioner; and consequently to direct the respondents to allow the petitioner's business in terms of Distributorship Agreement dated 01.07.2010, with renewal of agreement. 2. The case of the petitioner, in brief, is as follows:- 2-1. The petitioner is carrying on Gas Agency business, as a partnership firm. The petitioner's business partner one Mr.K.Kesavan, who is a Freedom Fighter, applied for Distributorship of Indane Liquefied Petroleum Gas to the respondent-Oil Corporation and he was also appointed as a Distributor and to that effect a Distributorship Agreement was entered on 24.02.2010. 2-2. The said Kesavan, being 90 years old, was permitted by the Respondent-Oil Corporation to be assisted by a person in the business as a partner and after obtaining prior consent from the respondent-Oil Corporation, the said Kesavan entered into a partnership agreement with the petitioner herein, on sharing ratio of 51-49, which was duly executed and registered as Doc.No.32/2010 on 1st July, 2010. Subsequently, both the partners have jointly executed a fresh Distributorship Agreement with the respondent-Oil Corporation on 01.07.2010 and have been carrying on the business strictly complying with the conditions of the agreement. 2-3. While so, during the year 2012, the lessor of the petitioner and his partner wanted them to vacate the leasehold property, wherein the petitioner and his parter Kesavan were running the Gas Agency godown, and as a result, the petitioner purchased a property measuring 46.450 cents in S.No.240/3 situated at Puliyadi, Putheri, Vadaseri Village, Kanyakumari District, with a view to shift their godown. The petitioner gave application dated 21.09.2013 to the 3 respondents for shifting their godown to their own property and they also submitted a representation to the respondents seeking to permit them to shift their godown. As per the conditions of Distributorship Agreement, the Distributor is entitled to shift their place of godown with the prior approval of the respondents. The Sales Officer of the respondent-Corporation, the rd respondent herein, also inspected the proposed place for shifting the godown of the petitioner. 2-4.
As per the conditions of Distributorship Agreement, the Distributor is entitled to shift their place of godown with the prior approval of the respondents. The Sales Officer of the respondent-Corporation, the rd respondent herein, also inspected the proposed place for shifting the godown of the petitioner. 2-4. Since there was delay in consideration of the request of the petitioner and his partner, the petitioner's partner Kesavan had filed a Writ Petition in W.P.(MD).No.16054 of 2014 before this Court to direct the respondents to consider their request for shifting the place of business to their own land. Finally, the 2nd respondent by proceedings in Ref.MAO/603/14 dated 19.11.2014 accorded approval for shifting the godown of the petitioner. 2-5. In the mean time, a show cause notice dated 09.09.2014 was issued by the 1st respondent stating that they received a compliant from one Mr.Robert Singh, alleging that he had entered into a partnership agreement with the petitioner's partner Kesavan as early as on 08.01.2010 and the same has been concealed and suppressed to the knowledge of the respondent-Oil Corporation, which amounted to violating the conditions of Distributorship, warranting action for breach of trust under Clause 21, 23(c)(i) and 27(m) of the Distributorship Agreement. 2-6. The petitioner's partner Kesavan immediately sent a reply denying the said allegations and wanted to furnish copy of the complaint said to have been given by the said Mr.Robert Singh. The said Robert Singh is no way connected with the partnership business of the petitioner and the said Kesavan. The petitioner and the said Kesavan alone have signed the Distributorship Agreement with the respondent-Oil Corporation. In fact, there is no communication or exchange of letter between the petitioner and the said Robert Sigh at any point of time regarding the business or any complaint or dispute. Subsequently, the petitioner's partner Kesavan had also filed a writ petition in W.P.(MD).No.12833 of 2014 before this Court to forbear the respondent-Oil Corporation from suspending the petitioner's dealership. But, this Court has passed an order in the said writ petition on 6.8.2014 directing the 2nd respondent herein to consider the petitioner's representation on merits and in accordance with law. 2-7. While situation stood thus, the petitioner's partner Kesavan died on 21.01.2015. Thereafter, the petitioner has been carrying on the business in the name and style of M/s.Nanjil Indane Gas Agency.
2-7. While situation stood thus, the petitioner's partner Kesavan died on 21.01.2015. Thereafter, the petitioner has been carrying on the business in the name and style of M/s.Nanjil Indane Gas Agency. While so, the petitioner was given a personal hearing on 3.7.2015 and he gave his explanation stating there was no violation of conditions of Distributorship Agreement and the petitioner and the said Kesavan alone had signed the Distributorship Agreement with the respondent-Oil Corporation; that at no point of time the said complainant Robert Singh sent any notice or letter to them disputing or objecting to the partnership of the said Kesavan with the petitioner. Though the said Robert Singh claimed that a partnership deed was executed on 08.01.2010, which is prior to grant of Distributorship to late K.Kesavan, the said Robert Singh has not signed any agreement or document with the respondent-Corporation. The said Robert Singh is not a party to any of the agreement between the petitioner and the respondents. Hence, the show cause notice issued by the respondents is pre-matured. As such, according to the petitioner, the impugned order passed by the 1st respondent is liable to be quashed. 3. Along with the writ petition, the petitioner has filed a Miscellaneous Petition in M.P.(MD).No.1 of 2015 seeking interim stay of the operation of the impugned order passed by the st respondent. This Court, by order dated 26.08.2015, has granted interim stay for a period of three weeks. 4. On appearance, the respondents have filed counter affidavit contending as follows:- 4-1. The writ petition has become infructuous as the alleged impugned proceedings of termination had been effected even as early as on 14.08.2015, after following all procedures as adumbrated in the policy guidelines of the Indian Oil Corporation and also in line with its own procedures. Therefore, the question of staying/quashing the impugned proceeding does not arise, as nothing survives in the present writ petition. If at all the petitioner wishes to challenge the termination order, as per the Dealership Agreement, his remedy is before the Arbitrator under Arbitration Proceeding and this writ petition is not maintainable both in law and facts.
Therefore, the question of staying/quashing the impugned proceeding does not arise, as nothing survives in the present writ petition. If at all the petitioner wishes to challenge the termination order, as per the Dealership Agreement, his remedy is before the Arbitrator under Arbitration Proceeding and this writ petition is not maintainable both in law and facts. The petitioner has suppressed the material facts, and concealed and misrepresented as if subsequent to issuance of termination notice dated 27.07.2015 nothing had happened, for the sole reason to obtain some interim order from this Court, thereby to coerce the respondents and its officials to cause confusion and making the administration work to be paralyzed. Hence, the writ petition is liable to be dismissed on heavy costs for suppression of material facts and also not coming to the Court with clean hands. 4-2. After taking over the distributorship from the petitioner on 14.08.2015 with 14746 Customers' connections, all the connections had been distributed to seven existing distributors. Hence, in pursuance to the termination order, taking over the distributorship and distributing the customers connection, the dealership had been transferred to seven existing distributors and to this effect, a public notice had also been put on, so as to make convenient for the customers to approach the present distributors to whom their respective connections had been entrusted. Accordingly, the existing distributors have also reacted and gave connections to the public. When all those subsequent events happened, the petitioner had conveniently suppressed all those material facts, and come to the Court and obtained the order of stay of termination proceeding by misrepresenting and misguiding the Court, by showing the image as if the petitioner has got prima facie case for getting interim order. 4-3. With regard to the factual aspects, it is stated by the respondents in the counter affidavit that one Mr.K.Kesavan was appointed as Indane Distributor at Nagercoil under category of Freedom Fighter (FF). On the basis of such appointment, he commenced the distributorship under the name and style of M/s.Nanjil Indane Gas Agency. As a Distributor, he had signed the Distributorship Agreement on 24.02.2010 agreeing to abide by the terms and conditions of the said Agreement.
On the basis of such appointment, he commenced the distributorship under the name and style of M/s.Nanjil Indane Gas Agency. As a Distributor, he had signed the Distributorship Agreement on 24.02.2010 agreeing to abide by the terms and conditions of the said Agreement. Subsequently, the distributorship was reconstituted and the petitioner herein was inducted as one of the partners in the said business, holding 49% share and the said K.Kesavan was holding 51% share and a fresh distributorship agreement was executed on 01.07.2010. 4-4. While so, a complaint was received from one Robert Singh against the petitioner. After confirming the unauthorized operation by the person other than the dealer, on the basis of thorough investigation as well as conducting personal enquiry of the petitioner and the complainant, and after gathering material documentary evidence, it has been proved that the petitioner has violated the dealership agreement. Hence, show cause notice was issued on 09.09.2014 & 24.09.2014 in line with the terms of the Dealership Agreement. In response to the show cause notice, the petitioner had replied vide letter dated 18.09.2014 and 01.10.2014, mentioning unacceptable reasons and explanations. The partnership entered into among complainant, petitioner and other two persons had been notarized by the Notary Public; as such the same cannot be disowned. Further, the petitioner had executed partnership deed along with complainant Robert Singh, Jose Christober and Mr.Virugesh Nayaham. In the enquiry, other than the petitioner herein, all the other three persons accepted the execution of the partnership agreement. The act of the petitioner is in clear violation of Clauses 21, 23(c)(i) and 27(m) of Distributorship Agreement entered by the respondent with the said Kesavan and the petitioner on 24.02.2010 for running the said Indane Gas Agency. Hence, the impugned order has been passed terminating the dealership agreement with the petitioner. According to the respondents, there is no infirmity in the impugned order passed by the 1st respondent. Thus, the respondents sought for dismissal of the writ petition. 5. The learned senior counsel appearing for the petitioner submitted that the petitioner herein and the said K.Kesavan were running a partnership firm in the name and style of M/s.Nanjil Indane Gas Agency. The petitioner's partner K.Kesavan is a freedom fighter and he was appointed as a dealer for the respondent-Oil Corporation, under Freedom Fighter quota; and he signed a Distributorship Agreement with the respondent-Oil Corporation on 24.02.2010.
The petitioner's partner K.Kesavan is a freedom fighter and he was appointed as a dealer for the respondent-Oil Corporation, under Freedom Fighter quota; and he signed a Distributorship Agreement with the respondent-Oil Corporation on 24.02.2010. Subsequently, the petitioner and his partner K.Kesavan had jointly executed a fresh Distributorship Agreement with the respondent-Oil Corporation on 01.07.2010. At this juncture, it appears that a complaint was given by one Robert Singh to the respondent-Oil Corporation claiming that on 08.01.2010 a partnership agreement was entered into between himself and the petitioner's partner K.Kesavan and the said fact was suppressed by them. Based on the said complaint, the petitioner has been issued with the show cause notices dated 09.09.2014 & 24.09.2014 by the respondents. 6. The learned senior counsel appearing for the petitioner would further submit that though the complainant was alleged to have been given by Mr.Robert Singh, absolutely no proof was produced on the side of the respondents that there was a partnership agreement between the petitioner's partner Kesavan and the said Robert Singh. Further, even as per the statement made in the alleged complaint of the said Robert Singh, he entered into a partnership agreement with the petitioner's partner Kesavan on 08.01.2010 ie., prior to the signing of the Distributorship Agreement of the said Kesavan with the respondent-Oil Corporation. Under such circumstance, the respondents ought not to have issued show cause notice to the petitioner on the basis of the alleged complaint given by the said Robert Singh, because admittedly even as per the said alleged complaint, no partnership agreement was entered into between the said Robert Singh and the petitioner's partner Kesavan after the signing of the Distributorship Agreement on 24.02.2010. The learned senior counsel appearing for the petitioner has further denied the statement made in the counter filed by the respondents that pursuant to the termination order, the respondents had taken over the distributorship from the petitioner on 14.08.2015. 7. Per contra, the learned senior counsel appearing for the respondents submitted that pursuant to the impugned order, on 14.08.2015 the respondent-Oil Corporation has taken over the distributorship of the petitioner with 14746 customers' connections and all connections were distributed to seven existing distributors. Thereafter, the present writ petition has been filed by the petitioner on 25.08.2015, by suppressing the fact that the distributorship was already taken over from the petitioner by the respondents.
Thereafter, the present writ petition has been filed by the petitioner on 25.08.2015, by suppressing the fact that the distributorship was already taken over from the petitioner by the respondents. Therefore, the writ petition is liable to be dismissed on the ground of suppression of material facts. 8. Further, the learned senior counsel appearing for the respondents, by inviting the attention of this Court to Partnership Agreements dated 08.01.2010 & dated 10.05.2010 entered into among the petitioner herein, one Vijuresh Nayagam, Jose Christobher and Robert Singh, submitted that there were two partnership agreements in respect of the subject dealership business and since the petitioner herein has not shared the benefit with the other partners, the complaint was lodged against the petitioner. The learned senior counsel for the respondents further submitted that the 1 petitioner by using the name of the freedom fighter Kesavan and got the dealership. Since the act of the petitioner is in violation to Clauses 21, 23(c)(i) & 27(m) of the Distributorship Agreement, the impugned order was passed by the st respondent terminating the distributorship of the petitioner. 9. That apart, the learned senior counsel appearing for the respondents has also submitted that there is a clause for arbitration under Clause 37(a) of the Distributorship Agreement and the petitioner is at liberty to invoke the arbitration clause if he is aggrieved over the impugned order. In support her contention, the learned senior counsel appearing for the respondents relied upon the judgment reported in (2014) 1 SCC 329 [Gail (India) Ltd., Vs. Gujarat Sate Petroleum Corpn. Ltd.,). That apart, the learned senior counsel has also relied upon the decisions of this Court in the following cases_ i) W.P.No.(MD).No.10434 of 2014, dated 02.07.2014, in the case of V.Renganathan Vs. Indian Oil Corporation Limited. ii) W.P.Nos.19447 of 2011 and batch of cases, dated 30.09.2011, in the case of M/s.Sangeeth Textiles Ltd and other Vs. M/s.The Cotton Corporation of India Limted and others. iii) W.P.(MD).No.12583 of 2011, dated 24.08.2012, in the case of A.Usha Devi Vs. Indian Oil Corporation. 10. By way of reply, the learned senior counsel appearing for the petitioner submitted that if there is any violation of principles of natural justice, writ petition is very well maintainable. In support of his contention, the learned senior counsel appearing for the petitioner has relied upon the judgment reported in AIR 2003 Supreme Court 2120 (Harbanslal Sahnia Vs. Indian Oil Corpn.
In support of his contention, the learned senior counsel appearing for the petitioner has relied upon the judgment reported in AIR 2003 Supreme Court 2120 (Harbanslal Sahnia Vs. Indian Oil Corpn. Ltd.,) and (1998) 8 SCC 11 [Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbaiand others]. 11. I have carefully heard the submissions made on either side and perused the materials available on record. 12. Though very many contentions have been raised on both sides with respect to the factual aspects of this case, this Court is not dealing with them, because this Court cannot conduct any roving enquiry in this writ petition with regard to the disputed questions of facts. In view of the submissions made on either side, the only question that has to be decided in this matter is as to whether the writ petition is maintainable when there is a clause for arbitration in the Distributorship Agreement. 13. According to the learned senior counsel appearing for the petitioner, if there is any violation of principles of natural justice, the writ petition is very well maintainable before this Court. In this regard, the learned senior counsel has also placed reliance upon the judgments reported in AIR 2003 Supreme Court 2120 (Harbanslal Sahnia Vs. Indian Oil Corpn. Ltd.,) and (1998) 8 SCC 11 [Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbaiand others] 14. But, in my considered opinion, the question as to whether the writ petition is maintainable or not can be decided only based on the facts and circumstances of each case. In the instant case, the petitioner is denying the agreement alleged to have been executed between the petitioner's partner Kesavan and one Robert Singh. Further, according to the learned senior counsel appearing for the petitioner, the petitioner is still holding the distributorship and distributorship has not been taken over by the respondent-Corporation from the petitioner. Whereas, according to the learned senior counsel appearing for the respondents, the petitioner herein has entered another partnership agreement with one Robert Singh and another two persons and since the petitioner did not share the profit of the business, the complaint was lodged by the said Robert Singh. Thus, it is the submission of the learned counsel for the respondent that the petitioner had violated the condition of the distributorship agreement. As stated earlier, this Court is not conducting any roving enquiry into the disputed questions of facts.
Thus, it is the submission of the learned counsel for the respondent that the petitioner had violated the condition of the distributorship agreement. As stated earlier, this Court is not conducting any roving enquiry into the disputed questions of facts. The issue involved in this writ petition has purely arisen out of the contractual obligations. Under Clause 37(a) of the Distributorship Agreement, there is an arbitration clause, in case of any dispute between the parties. Clause 37(a) reads as follows:- “All questions, disputes and differences arising under or in relation to this Agreement shall be referred to the sole arbitration of the Director (Marketing) of the Corporation. If such Director (Marketing) is unable or unwilling to act as the sole arbitrator, the matter shall be referred to the sole arbitration or some other officer of the Corporation by such Director (Marketing) in his place, who is willing to act as such sole arbitrator. It is known to the parties herein that the Arbitrator appointed hereunder is an employee of the Corporation and may be Shareholder of the Corporation. The Arbitrator to whom the matter is originally referred, whether the Director (Marketing) or Officer, as the case may be, on his being transferred or vacating his office or being unable to act, for any reason, the Director (Marketing) shall designate any other person to act as arbitrator in accordance with the terms of the Agreement and such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. It is also the term of this Agreement that no person other than the Director (Marketing) or the person designated by the Director (Marketing) as aforesaid shall act as Arbitrator. The award of the Arbitrator so appointed shall be final, conclusive and binding on all the parties to the Agreement and provisions of the Arbitration & Conciliation Act, 1996 or any statutory modification or re-enactment thereof and the Rules made thereunder and for the time being in force shall apply to the arbitration proceedings under this clause.” When there is an arbitration clause under the Distributorship Agreement, the petitioner has to seek his remedy only by invoking the said arbitration clause. In this regard, it would be appropriate to place reference in the judgment reported in (2014) 1 SCC 329 [Gail (India) Ltd., Vs. Gujarat Sate Petroleum Corpn.
In this regard, it would be appropriate to place reference in the judgment reported in (2014) 1 SCC 329 [Gail (India) Ltd., Vs. Gujarat Sate Petroleum Corpn. Ltd.,) wherein it has been held that when there is an efficacious alternative remedy, the High Court should relegate the case to the alternative remedy or arbitration Tribunal. The relevant portion in the said judgment reads as follows:- “28.We also agree with Shri.Nariman that the remedy of arbitration available to the respondent under Para 15.5 of the GSA was an effective alternative remedy and the High Court should not have entertained the petition filed under Article 226 of the Constitution of India. The contents of the Gsa, the price side letters and the correspondence exchanged between the appellant and the respondent give a clue of the complex nature of the price fixation mechanism. Therefore, the High Court should have relegated the respondent to the remedy of arbitration and the Arbitration Tribunal could have decided complicated dispute between the parties by availing the services of experts. Unfortunately, the High Court presumed that the negotiations held between the appellant and the respondent were not fair and that the respondent was entitled to the benefit of the policy decision taken by the Government of India despite the fact that it had not only challenged that decision but had also shown disinclination to accept the offer made by the appellant to supply gas at the pooled price and had insisted on mutually agreed price.” The judgment delivered by the Andhra Predesh High Court, in the case of Ambati Ramaiah Etc., Vs. Government of Andhra Pradesh (W.P.Nos.135 of 2011 and etc, dated 09.04.2012) gives a fitting answer to the issue involved in this matter. The relevant portion of the said jdugment is extracted hereunder_ “41.While a flexible and liberal approach bereft of technicalities was advised to be adopted in respect of considering the relief under Article 226 by Andi Mukta S.M.V.S.S.J.M.S Trust Vs. V.R.Rudani (1 supra), Zee Teleflims Ltd. Vs. Union of India (2 supre) following Pradeep Kumar Biswas Vs. Indian Institute of Chemical Biology (3 supra) concluded the Board of Control for Cricket in India to be not 'State' or 'instrumentality of State' for purpose of Article 12 and so shold be the legal status of Andhra Cricket Association.
V.R.Rudani (1 supra), Zee Teleflims Ltd. Vs. Union of India (2 supre) following Pradeep Kumar Biswas Vs. Indian Institute of Chemical Biology (3 supra) concluded the Board of Control for Cricket in India to be not 'State' or 'instrumentality of State' for purpose of Article 12 and so shold be the legal status of Andhra Cricket Association. While as already stated, a writ under Article 226 may be available to any aggrieved person, a duty in respect of whom in the light of a positive obligation owned by a person or authority to the affected party is violated in performance of activities akin to public duties or State functions, the majority opinion in Zee Telefilms Ltd. Vs. Union of India (2 supra) may not amount to exclude the maintainability of a writ petition under Article 226 of the Constitution of India only on the ground of the association in question being not a State within the meaning of Article 12 of the Constitution of India as opined in C.Babu Rao Vs. Ditrict Registrar, Registration of Societies, Hyderabed (12 supra). However, the possible recourse by way of a writ petition under Article 226 apperas to become unavilable in view of the availability of an efficacious alternative statutory remedy under Section 23 of the Andhra Pradesh Societies Registration Act, 2001, even if not by rule/regulation 58 of Andhra Cricket Association. Either or both of them appear to make unavailable the remedy of a writ to an aggrieved member. In this regard, it may be noted that W.P.No.21134 of 2009 filed by the petitioner in W.P.No.135 of 2011 and W.P.No.11834 of 2009 filed by the petitioner in W.P.No.12884 of 2011 were admittedly dismissed by this Court as not maintainable probably in view of the availability of alternative remedy and it is not disputed that those judgments have also become final. Under the circumstances, the writ petitions against the Andhra Cricket Association and its Honorary General Secretary can be concluded to be not maintainable in view of rule/regulation 58 of the Association containing an arbitration clause and in any view, because of Section 23 of the Andhra Pradesh Societies Registration Act, 2001.” The dictum laid down in the above said judgments are squarely applicable to the present facts of the case.
Hence, I am of the considered view that the present the writ petition is not maintainable, as there is an efficacious alternative remedy available to the petitioner. 15. Since this Court has come to the conclusion that the writ petitions are not maintainable, I am not dealing with the other submissions made by the learned counsel on either sides with regard to the other factual aspects. 16. In the result, the writ petition is dismissed. Consequently, connected Miscellaneous Petitions are closed. No costs.