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2021 DIGILAW 392 (ALL)

Virendra Pal v. State of U. P.

2021-03-12

JAYANT BANERJI, SUNITA AGARWAL

body2021
JUDGMENT : 1. Heard Sri R.K. Khanna, learned counsel for the petitioners and Shri Anand Tewari, learned counsel for the respondent-Corporation. Shri Pankaj Saxena appears on behalf of the respondent no. 7. 2. By means of the present writ petition, the petitioners seek for quashing of the order dated 09.01.2018 passed by the respondent No.4, Deputy General Manager, (LPG Sales), Indian Sub-Divisional Officer, Indian Oil Corporation, Bareilly, Area office, Bareilly. 3. Further prayers in the writ petition are as under:- "(ii) Issue a writ, order or direction in the nature of mandamus, commanding and directing the respondents to re-constitute the proposal of Partnership Deed of the petitioner No.1 and the name of the petitioner No.2 may be added in place of Ex wife of the petitioner, namely Smt. Priti Srivastava (Respondent No.7.) (iii) Issue a writ, order or direction in the nature of mandamus commanding the respondents to re-start the proper supply of LPG for the petitioner's firm." 4. Brief facts relevant to decide the controversy are that the petitioner No.1 namely Virendra Pal had applied and submitted application form for allotment of Rajiv Gandhi Gramin LPG Vitrak distributorship (RGGLV) in the open category at Bhamora, Tehsil Aonla District Bareilly under an advertisement dated 17.10.2009 issued by the Indian Oil Corporation Limited. After selection by an interview, letter of intent had been issued to the petitioner No.1 on 08.02.2011. Few pre-conditions set out in the letter of intent for commissioning of distributorship are relevant to be extracted hereunder:- "(i) Operate the RGGLV personally. However you will induct your spouse who will be co-owner as 50% partner. (ii) Shift your residence to Bhamora (if you are presently staying away from the location) in order to personally operate the RGGLV as stated para 3.3. above and give us a written undertaking to this effect. (iii) If already employed, you will have to submit acceptance of resignation letter from your employer prior to the issuance of Appointment Letter by us." (iv) You will have to undergo training on RGGLV operation for one of two weeks after which you will have to take a quiz. Your score should not be less than 80% marks. Failing which you will have to again undergo re-training so that you can score minimum 80% marks. Your score should not be less than 80% marks. Failing which you will have to again undergo re-training so that you can score minimum 80% marks. (v) After you have complied with the conditions spelt out herein above, you will be confirmed/formalized by an Appointment Letter followed by the signing of our standard RGGLV Agreement by both you and us. (vi) You will be required to deposit interest free refundable security deposit of Rs.2 lakhs. We will have the right to adjust any dues to us from this amount at the time of resignation/termination. However, in case of termination of the RGGLV on account of proven malpractice, the said security deposit shall be forfeited." 5. It was further provided that after compliance of the conditions spelt out in the letter of intent including those extracted above, commissioning of distributorship would be confirmed/formalized by an appointment letter followed by the signing of the standard agreement between the Corporation and the selected person/petitioner herein. 6. The letter of appointment dated 28.11.2011 was, thereafter, issued on fulfillment of the conditions in the letter of intent. It was indicated therein that as per the terms of the advertisement and the letter of intent, the spouse of the petitioner would be 50% partner. It also contained a condition that in case the selected person was unmarried or widow or widower or divorcee, an undertaking in the attached format had to be given. 7. It further appears from the record that a partnership deed was executed between the petitioner and his ex-wife, i.e. respondent No.7 herein, copy whereof has been appended in the counter affidavit of the respondent No.7. The partnership deed contains some clauses as under:- "14. That in case of death of any partners hereto the partnership firm shall not be dissolved but the legal heirs of the deceased partners shall be admitted to the partnership firm in place of deceased partner subject to such terms and conditions as may be mutually agreed by the surviving partners and legal representative of the deceased partner after prior written approval of Indian Oil Corporation Ltd. 15. That all the disputed relating to partnership shall be referred to Arbitrator under the Arbitrations and Conciliation Act 1996 and the decision of the Arbitrator shall be final and binding on the parties. 16. That all the disputed relating to partnership shall be referred to Arbitrator under the Arbitrations and Conciliation Act 1996 and the decision of the Arbitrator shall be final and binding on the parties. 16. That the partnership shall be at will and if any partner is willing to retire from the partnership then he or she will have to take prior written permission of the Indian Oil Corporation Ltd. 17. No change in the partnership deed without prior written approval of Indian Oil Corporation Ltd. 18. That no change in the constitution of the partnership deed shall be made either by induction of new partner in the firm or permission retire shall be made without prior written approval of the Corporation. 19. That the partnership deed shall not be altered/dissolved without the written consent of Indian Oil Corporation Ltd." 8. A dealership agreement dated 13.12.2011 was then executed between the Indian Oil Corporation with the partnership firm under the name and style of M/s O.P. Indiane Gramin Vitrak, Bhamora, Tehsil Aonla, District Bareilly as "distributor". The partnership firm continued to run the business of distributorship. Unfortunately a matrimonial dispute arose between the spouses, i.e. the petitioner No.1 and respondent No.7 which had resulted in passing of a decree dated 04.01.2016 in Matrimonial Case No.190 of 2015 under Section 13-B of the Hindu Marriage Act' 1955. The marriage between the petitioner and respondent No.7 had been dissolved by the said decree. 9. The petitioner No.1 had then approached the respondent No.4 by writing a letter seeking permission for reconstitution of the distributorship firm for replacing his present wife (petitioner No.2) in place of his Ex.wife (respondent No.7). In the meantime, on a letter written by respondent No.7 raising dispute regarding continuance of business by the above named partnership firm, the supply of LPG was suspended by an order dated 15.09.2017, which is appended alongwith the counter affidavit of respondent Nos.2 to 6. The contents of the said letter is pertinent to be extracted hereunder:- "Ref: BAO/LPG/OPI Date: 15.09.2017 M/S OP INDANE GRAMIN VITRAK, BHAMORA, BAREILLY, SUBJECT: SUSPENSION OF SALES AND SUPPLIES: M/S OP INDANE GRAMIN VOTRAK, BHAMORA, BAREILLY Dear Sir/Madam Due to ongoing dispute between partners which resulted into locking of the distributorship and it's non operation continuously for last five days customers have affected adversely. In view of above, to maintain smooth supplies to customers, alternate arrangements is being made by immediately transferring your customers to M/s Jaiswal Indane Gas Services, and by suspending the supplies of your distributorship till the dispute is sorted out by the partners of your distributorship. You are advised to transfer your customers M/s Jaiswal Indane Gas Services in consultation with AM (LPG-S), Bareilly and hand over all equipments. Also, you are advised to get the matter sorted out between partners as soon as possible and reopen the distributorship. Thanking You, Yours Faithfully, For Indian Oil Corporation Ltd. DGM, (LPG-S)" 10. It is admitted to the counsels for the parties that the dealership agreement executed between the partnership firm "as distributor" and the Corporation is subsisting and has not been terminated till date. 11. It is vehemently argued by the learned counsel for the petitioners that the approach of the Corporation in refusing to reconstitute the distributorship is irrational, in as much as, the then wife (respondent No.7) was inducted as partner in the distributorship firm in view of the mandatory condition laid down in the marketing guidelines of the Corporation for commissioning of the dealership. The selection, however, was only of individual applicant i.e. petitioner No.1, who was required to leave his employment to get the distributorship. Whereas no such requirement was there for his wife (respondent No.7). The reconstitution of commissioned dealership is possible in view of the reconstitution guidelines framed by the Corporation. However, claim of the petitioner has been repelled on the ground that reconstitution guidelines do not contemplate the event of divorce or dissolution of marriage as a condition to permit the reconstitution of commissioned dealership. 12. Sri Anand Tewari learned counsel for the respondent, on the other hand, submits that the distributorship agreement was executed with the partnership firm and there cannot be a transfer of business (distributorship) from one partnership firm to another or to sole proprietor, except in the event of an agreement between the partners. 13. Learned counsel appearing for the respondent No.7 further argued that dissolution of marriage has nothing to do with the business of partnership firm, which has to be dealt in accordance with the provisions of the Indian Partnership Act' 1932 (hereinafter referred as Act' 1932). 14. 13. Learned counsel appearing for the respondent No.7 further argued that dissolution of marriage has nothing to do with the business of partnership firm, which has to be dealt in accordance with the provisions of the Indian Partnership Act' 1932 (hereinafter referred as Act' 1932). 14. Considering the factual position narrated above, it would be pertinent to note the relevant reconstitution guidelines of commissioned distributorship of the Corporation. Relevant clause 2 reads as under:- "2. Reconstitution of Commissioned Distributorship 2.1 Reconstitution will be permitted for induction of minority partner(s) only after five years of commissioning of distributorship. 2.2 Subsequent re-constitution shall be considered only after five years from the date of the last re-constitution. 2.3 The Sole proprietor, irrespective of age may be allowed to resign from the dealership/distributorship (after serving the dealership/distributorship for minimum 10 years) provided the transfer of share is proposed in favour of; (a) his/her family member (as defined in Selection Guidelines); (b) married children of Sole Proprietor; (c) grandchildren of sole proprietor (in case of death of children of the proprietor); in the above order of preference. This transfer will be subject to the incoming person fulfilling all extant requirements for becoming a distributor/dealer and the outgoing sole proprietor would become ineligible to apply for another dealership/distributorship in future. 2.4 Partner(s) can resign from the distributorship after 10 years of holding distributorship. In the event of resignation by partner(s), the remaining partner(s) put together shall hold controlling stake i.e. at least 51% shares in the distributorship. 2.5 In cases of death of the sole distributor, reconstitution may be made in favour of the legal heir. However, if there is no legal heir(s) or legal heir(s) has expressed unwillingness, the distributorship shall be terminated. 2.6 In cases of death of one of the partner(s), the partnership shall be reconstituted with the legal heir(s) of the deceased partner(s) and surviving partner(s). However, if there is no legal heir(s) or the legal heir(s) has expressed unwillingness, the distributorship shall be reconstituted with the surviving partner(s). Simultaneous induction of outside partner(s) can permitted at this stage subject to such reconstitution meeting all other criteria including minimum time period from commissioning/last reconstitution of the distributorship. However, if there is no legal heir(s) or the legal heir(s) has expressed unwillingness, the distributorship shall be reconstituted with the surviving partner(s). Simultaneous induction of outside partner(s) can permitted at this stage subject to such reconstitution meeting all other criteria including minimum time period from commissioning/last reconstitution of the distributorship. 2.7 In case of incapacitation due to serious illness/accident of the distributor, whether sole or partner, resulting in total and permanent disability, which will disable him/her to work or follow any occupation or profession, a minority partner may be inducted. 2.8 The restriction of time period of 5 years as mentioned in 2.1 above will not be applicable for re-constitution on account of death/incapacitation of the proprietor/partner." 15. There is no dispute about the fact that induction of respondent No.7 as partner was in view of the mandatory guidelines of the Corporation wherein the petitioner No.1, a married person had to induct his spouse as 50% partner. The eligibility condition for selection for grant of dealership, however, had to be fulfilled by the individual applicant only, petitioner No.1 in this case. 16. Further, it is an admitted fact of the matter that the dealership agreement was executed with the partnership firm namely M/s O.P. Indane Gramin Vitrak which had been constituted and registered under the Partnership Act 1932. The partnership firm continues to exist as on date as it is not the case that any of the partners had withdrawn from the partnership in accordance with the terms and conditions of the partnership deed. The induction or introduction of new partner into a partnership firm is possible only with the consent of the partners and previous written approval of the Indian Oil Corporation. The dissolution or reconstitution of the existing partnership firm is permissible only in accordance with the provisions of the Act' 1932. The reconstitution policy framed by the Corporation, extracted above, is in conformity with the Partnership Act. 17. Until dissolution or reconstitution of the existing partnership firm in accordance with the provisions of the Act 1932, the business of the partnership firm cannot be transferred to anyone. 18. The record indicates that the order dated 15.09.2017 passed by the Corporation suspending supply of LPG to the partnership firm/distributor was subjected to challenge in Writ Petition No.50612 of 2017 filed by the petitioner No.1 herein. 18. The record indicates that the order dated 15.09.2017 passed by the Corporation suspending supply of LPG to the partnership firm/distributor was subjected to challenge in Writ Petition No.50612 of 2017 filed by the petitioner No.1 herein. While disposing of the writ petition, it was observed by this Court that the Corporation shall consider the petitioner's application dated 19.09.2017. 19. Another partner namely respondent No.7 had also approached this Court in Writ Petition No.57079 of 2017 ( Smt. Priti Srivastava Vs. Indian Oil Corporation Ltd. & others.) for a direction to consider her application before passing any order for reconstitution of the partnership firm. The said writ petition was disposed of vide judgement and order dated 30.11.2017 directing the Corporation to consider the application of respondent No.7 while considering the case of the petitioner No.1 herein. The impugned order dated 09.01.2018 was passed by the Corporation pursuant to the aforesaid two orders passed by this Court on 02.11.2017 and 30.11.2017. The request of the petitioner No.1 for reconstitution of commissioned dealership was considered in light of the reconstitution policy of the Corporation in vogue. 20. It appears that since without dissolution or reconstitution of the existing partnership firm, which had entered into the dealership agreement with the Corporation, in accordance with the provisions of the Partnership Act, reconstitution of commissioned dealership was not possible and hence the request of the petitioner No.1 was rejected. The decision of the Corporation as indicated in the order dated 09.01.2018, being based on its policy cannot be faulted. 21. It is, however, kept open for the existing partners of the dealership firm to take recourse to the remedies available under the common law or invoke the arbitration clause in the partnership deed to settle their inter-se dispute relating to partnership. 22. In case, the partners arrive at a settlement, they may approach the Corporation to seek permission for reconstitution of the partnership firm in accordance with the provisions of the Act' 1932 and the new or reconstituted firm, as the case may be, may run the business of the existing firm in accordance with the terms and conditions of the settlement. 23. As far as the order dated 15.09.2017 suspending supplies is concerned, it seems that the petitioner No.1 herein had pressed for reconstitution of the distributorship rather than restoration of supply to the distributorship firm. 23. As far as the order dated 15.09.2017 suspending supplies is concerned, it seems that the petitioner No.1 herein had pressed for reconstitution of the distributorship rather than restoration of supply to the distributorship firm. Both the partners were contesting on the issues of reconstitution of the commissioned dealership. 24. We may, however, note that the order dated 15.09.2017 does not indicate that any show cause notice was issued to the partner(s) or firm to explain as to why supply be not suspended as the dispute between them had adversely affected the business. Further in the previous writ petition while relegating the petitioner No.1 herein to approach the Corporation the validity of the action taken by the Corporation for suspension of supplies had not been looked into. 25. In view of the above, without entering into the merits of the action of the Corporation in suspending the supplies by order dated 15.09.2017, we only keep it open that the existing distributorship firm, if approaches the Corporation with the request to run its business or restore supplies, the Corporation shall take a decision by passing a reasoned and speaking order strictly in accordance with its policy. 26. It is further made clear that pendency of any negotiations for settlement between the contesting parties would not preclude the Corporation from taking such lawful steps in the interest of its business as it deems fit. 27. In any case, before taking any adverse action against the existing distributor, due notice and opportunity be granted to the partner(s) (agents of the firm) to explain their action or inaction. 28. In view of the above discussion, no writ of mandamus as prayed for in prayer Nos.(ii) & (iii) can be issued. The prayer No.(i) seeking for quashing of the order dated 09.01.2018 is found devoid of merits and hence rejected. 29. Keeping all possibilities open for the contesting parties to settle their dispute to the extent provided above, the writ petition is disposed of.