JUDGMENT : Arindam Sinha, J. The petitioners are aggrieved by the contents of letter dated 28th January, 2009 issued by Indian Oil Corporation. The offending portion in that letter, according to the petitioners, is as follows:- “Subsequent to the re-interview, we have come to know from our Retail/Sales group that, there was undisputed liability of Rs.87,09,420.00 towards Municipal and other taxes to Howrah Municipal Corporation for the financial year 2005-06 which had not been shown in the books of account and audited balance sheet submitted along with the application. Had the amount been shown in the balance sheet, the profit amount would have reflected a negative balance during the reference period 2004-05, 2005-06 and 2006-07.” 2. Mr. Saha Roy, learned advocate appearing on behalf of the petitioners submitted, as required under the advertisement for applications by persons seeking to be selected as dealers of the respondent Oil Company, the petitioners had submitted their accounts duly audited which included the details of balance sheet items for the year ending on 31st March, 2006, copy of which is appearing at page 94 of the writ petition. Mr. Saha Roy submitted, the particulars of liabilities for expenses given thereby were correct particulars which showed Howrah Municipal Corporation tax payable for the year ending on 31st March, 2006, by the petitioners, to be of the sum of Rs.34,428/-. He submitted further, the Howrah Municipal Corporation had issued a demand dated 29th May, 2008 for the sum of Rs.87,09,420/- which was the basis for the impugned letter as would appear from paragraphs 3 and 4 therein reproduced above. The petitioners had stated in paragraph 22 of the writ petition that this was a demand made for the first time and made known to them on the receipt thereof. Hence, according to Mr. Saha Roy, there was no suppression or misrepresentation. The respondent Company had not been able to demonstrate that the duly audited account submitted for the period required was incorrect or false as had been shown to be or pronounced by any Authority including the Income Tax Authority. He therefore submitted, the said letter should be set aside and the respondent Oil Company compelled to appoint the petitioners as their dealer since they were otherwise found eligible to be so appointed. 3. On such submissions being made Ms. He therefore submitted, the said letter should be set aside and the respondent Oil Company compelled to appoint the petitioners as their dealer since they were otherwise found eligible to be so appointed. 3. On such submissions being made Ms. Meharia, learned advocate appearing on behalf of the respondent Oil Company had obtained leave to file a supplementary affidavit on behalf of her client, in spite of an affidavit-in-opposition, already filed. The reasons for leave granted to the Oil Company to use a supplementary affidavit were recorded in order dated 23rd December, 2015. Briefly, the reasons were that there was an interim order dated 7th August, 2009 made in which there were findings to the effect that the question for adjudication that remain in the writ petition, for it to be maintained and kept in the file, was regarding whether or not the private respondent was eligible to be appointed. Pursuant to such interim order the Oil Company had filed its affidavit-in-opposition. However, the petitioner having preferred an appeal, was successful in obtaining order dated 27th July, 2010 by which the findings in the interim order were held as could not be considered to be conclusive. In such circumstances, this Court had allowed the Oil Company to file supplementary affidavit. 4. Upon the supplementary affidavit having been filed, Mr. Saha Roy was once again invited to make his submissions. He submitted, the requirement for a candidate to be eligible for selection by the Oil Company included, inter alia, the candidate, if a company duly registered under the Companies Act, 1956, to furnish certificate from a Chartered Accountant to the effect that such company was a profit making one for the years ending 2004-05, 2005-06 and 2006-07. The certificate was to be issued on the basis of audited accounts. The petitioner no.1, being a company, furnished such certificate as well as its audited accounts to the Oil Company. In those accounts there was no disclosure of demand made by Howrah Municipal Corporation upon the petitioner for Rs.87,09,420/- towards Municipal and other taxes for the financial year 2005-06 as had been alleged in the letter impugned. 5. The petitioner no.1, being a company, furnished such certificate as well as its audited accounts to the Oil Company. In those accounts there was no disclosure of demand made by Howrah Municipal Corporation upon the petitioner for Rs.87,09,420/- towards Municipal and other taxes for the financial year 2005-06 as had been alleged in the letter impugned. 5. The controversy between the petitioners and the Oil Company is whether the demand ought to have been disclosed by the petitioners which would result in the petitioners not being able to show a profit in the concerned financial years to make them ineligible to apply or be considered for the distributorship. Mr. Saha Roy sought to demonstrate that it was a disputed demand. That his clients came to know about it after they had applied for the distributorship and, in any event, his clients knowing such was a wrongful demand were under no obligation to disclose it to have an effect on their accounts as audited and disclosed to the Income Tax Department as well as relied upon for the purpose of application for distributorship made. Mr. Saha Roy referred to an annexure in the supplementary affidavit filed by his clients, appearing at page 46 thereof being a certificate issued by Howrah Municipal Corporation to the petitioners certifying that tax clearance certificate up to 4th quarter 2009-10 had been issued to the petitioner company on 7th May, 2010, which indicated that it was not a defaulter to the Corporation for last financial years 2004-05 to 2009-10 and there thus was no suppression as alleged. 6. Ms. Meharia, drew attention to Section 211 of the Companies Act, 1956, the relevant portions of which are set out below:- “211(1) Every balance sheet of a company shall give a true and fair view of the state of affairs of the company as at the end of the financial year and shall, subject to the provisions of this section, be in the form set out in Part I of Schedule VI, or as near thereto as may be approved by the Central Government either generally or in any particular case; and in preparing the balance sheet due regard shall be had, as far as may be, to the general instructions for preparation of balance sheet under the hearing “Notes” at the end of that part: Provided……………………………………. (2) Every profit and loss account of a company shall give a true and fair view of the profit and loss of the company for the financial year and shall, subject as aforesaid, comply with the requirements of Part II of Schedule VI, so far as they are applicable thereto: Provided…………………………………….. (3)……………………………………………. (3A) Every profit and loss account and balance sheet of the company shall comply with the accounting standards. …….” Part I of Schedule VI, in the “CURRENT LIABILITIES” and “PROVISIONS” coming under the head “LIABILITIES” carries serial no.13 under it which is reproduced below:- “CURRENT LIABILITIES AND PROVISIONS: .…. .….. ...... B. PROVISIONS ….. …… (13) Other provisions. A foot note to the balance-sheet may be added to show separately:- (1) Claims against the company not acknowledged as debts. …….” 7. Ms. Meharia submitted further, the accounts disclosed by the petitioners for the three years had provisions for taxation and notes but there was no disclosure regarding the claim of Howrah Municipal Corporation made against it for the period of 7 years ending with the 4th quarter 2007-08. The petitioners were aware that there was a demand, albeit a wrong demand of a sum exceeding a crore of rupees which was reduced to Rs.87 lakhs and odd, the latter figure the Oil Company having come to know about. The allegation made in the petition that the petitioners for the first time in the year 2008 came to know about the demand of the Corporation for Rs.87 lakhs and odd purports to give an impression that there was no demand before the same was raised. There ought to have been provision in the accounts or at least a note to that effect and the absence of the same amounted to suppression by the petitioners warranting disqualification of their candidature. She also referred to pages 89-91 of the writ petition to demonstrate that as on 19th August, 2008 the Howrah Municipal Corporation made a demand of Rs.28,00,150/- for its claim on tax for the said period upon receipt of which the petitioners had claimed adjustment for monies paid before March, 2004 and ultimately paid the sum of Rs.17,24,412/- as is evident from the receipt dated 3rd September, 2008 granted by the Howrah Municipal Corporation disclosed at page 90 of the writ petition. She submitted, the Howrah Municipal Corporation upon getting the amount, issued the no dues certificate disclosed at page 46 of the supplementary affidavit filed by the petitioners. She submitted, therefore, the petitioners having shown small amounts of profits made in their accounts for the 3 years being financial years 2004-05, 2005-06 and 2006-07, without providing for any contingent liabilities, had paid the sum of Rs.17 lakhs and odd on 3rd September, 2008 out of the till of the company, for which, if provision had been made in its accounts for the said period, the same would have shown a loss to the petitioners. 8. Ms. Meharia, relied on Accounting Standard (AS) 29. She relied, in particular, on paragraphs 10, 14 and 26 therein. They are reproduced below:- “10.1 A provision is a liability which can be measured only by using a substantial degree of estimation. 10.2 A liability is present obligation of the enterprise arising from past events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits. 10.3 An obligating event is an event that creates an obligation that results in an enterprise having no realistic alternative to settling that obligation. 10.4 A contingent liability is:- (a) a possible obligation that arises from past events and the existence of which will be confirmed only be the occurrence of one or more uncertain further events not wholly within the control of the enterprise; or (b) a present obligation that arises from past events but is not recognized because: (i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or (ii) a reliable estimate of the amount of the obligation cannot be made. 14. A provision should be recognized when: (a) an enterprise has a present obligation as a result of a past event; (b) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and (c) a reliable estimate can be made of the amount of the obligation. If these conditions are not met, no provision should be recognized. 26. An enterprise should not recognize a contingent liability.” 9. Ms. If these conditions are not met, no provision should be recognized. 26. An enterprise should not recognize a contingent liability.” 9. Ms. Meharia submitted, as on 3rd September, 2008 the petitioner no.1 had obtained a receipt for having paid Rs.17,24,412/- out of its till against the demand of the Corporation for tax of previous years to obtain no dues certificate from it. She further submitted, this money to have come out of the till of the petitioner no.1 had to have had a provision made for it in the accounts of the said Company in the previous years in question. Had such provision been made, the Company could not have shown to have returned profits in those financial years. That is the suppression for which the petitioners are disentitled to any relief. 10. In reply Mr. Saha Roy drew attention to the certified copy of the writ petition being W.P. no.25544 (w) of 2008 obtained by the Oil Company and handed up to Court. He referred to page 20 of the said writ petition to show that the challenge in it was against a demand made by Howrah Municipal Corporation on 9th March, 2007, as appearing from the demand. He next referred to the supplementary affidavit filed by the Oil Company, to copies therein of the accounts disclosed by his client to the said company for the financial years 2004-05, 2005-06 and 2006-07 disclosed respectively from pages 112, 133 and 164. The relevant pages of those accounts appear at pages 121, 153 and 182 from which Mr. Saha Roy pointed out that profits after taxes were as on the dates indicated for those financial years. He submitted the profits indicated for the years 2004-05 and 2005-06 were shown as on dates prior to the demand dated 9th March, 2007. So far as the accounts of the year 2006-07 is concerned he referred to page 178 of the said supplementary affidavit being the annexure to the auditor’s report on the year ended 31st March, 2007. He referred to clauses 14 and 15 of the said annexure to submit that the auditor in certifying the accounts of his client for that year had excepted payment on account of municipal taxes. He submitted appropriate disclosure was thus made by his client and his client’s candidature, therefore, should be considered. 11. He referred to clauses 14 and 15 of the said annexure to submit that the auditor in certifying the accounts of his client for that year had excepted payment on account of municipal taxes. He submitted appropriate disclosure was thus made by his client and his client’s candidature, therefore, should be considered. 11. He submitted further, the advertisement inviting dealership was the result of a policy decision of the Government. The oil companies together had caused publication of the advertisement. His client had applied for dealership to HPCL as well. When Indian Oil Corporation informed HPCL about alleged non-disclosure on the part of his client, HPCL issued a conditional letter of intent. Upon causes shown by his client found to be sufficient by HPCL, the conditions imposed were withdrawn. 12. This Court appreciates the submissions on law made by Ms. Meharia. The petitioner company was obliged to disclose the true state of affairs regarding its finances in the accounts of the relevant years. The requirement of disclosure notified by publication in the Telegraph, Calcutta dated 16th September, 2007 issued at the instance of Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited under open category stated, inter alia, as under:- “Registered Co-operative Society/Company incorporated under Companies Act, 1956 should be making a net profit for previous three consecutive financial years as certified by a Chartered Accountant........” 13. The facts reveal the petitioner no.1 company complied with such requirement. The accounts submitted were audited accounts and accompanied by certificate. In such accounts the auditor had taken care to point out, inter alia, that payments on account of municipal taxes were excepted. In applying the provisions of Section 211 of the Companies Act, 1956 to the said accounts filed and disclosed in the supplementary affidavit of the Oil Company, keeping in mind that such accounts themselves were not said to be under challenge before any authority or forum, this Court does not find the allegation of suppression as one that should be held against the petitioner. By themselves those accounts cannot be said to have made or given an incorrect picture of the finances of the petitioner company nor do they appear to be in violation of the provisions of Section 211. 14. For the reasons aforesaid the writ petition succeeds. The letters dated 28th January, 2009 and 17th February, 2009 are both set aside and quashed. 14. For the reasons aforesaid the writ petition succeeds. The letters dated 28th January, 2009 and 17th February, 2009 are both set aside and quashed. The respondent Oil Company is directed to consider the candidature of the petitioner no.1 in the matter of awarding LPG distributorship. The steps, consequent to this judgment for the appointment of such a distributor, must be taken within a period of six weeks from the date of communication of a copy of this judgment upon the addressee of the said letters quashed and set aside. 15. The writ petition is thus disposed of.