JUDGMENT : Sandeep Sharma, J. Being aggrieved and dissatisfied with the order dated 8th October, 2018 (Annexure P-16), whereby dealership of petrol pump granted in favour of proforma respondent No.6 i.e. wife of petitioner came to be terminated, petitioner has approached this Court in the instant proceedings filed under Article 226 of the Constitution of India, praying therein for the following reliefs:- (i) That the impugned termination letter dated 08.10.2018 contained in Annexure P-15 passed by respondent Corporation may kindly be set aside and quashed. (ii) That the respondents may kindly be directed to transfer the 100% shares of the retail outlet/petrol pump under the name and Style M/s Ganpati H.P. Center in the name of petitioner No.2 by way of reconstitution in accordance with new guidelines dated 21.05.2018 contained in Annexure P-14. (iii) That the respondent Corporation may kindly be directed to pay mesne profit to the petitioner w.e.f. 08.10.2018 till date @ Rs.35,000/- per month alongwith appropriate interest. 2. Precisely, the relevant facts as emerge from the conjoint reading of the pleadings adduced on record by respective parties reveal that pursuant to advertisement issued by respondent No.2 in the year 2004, proforma respondent No.6 applied for dealership of the petrol pump under the reserved category (SC) at Bhoranj, District Hamirpur. Since proforma respondent No.6 was found eligible, therefore, she came to be issued Letter of Intent (LOI) for proposed retail outlet dealership for selling petroleum products vide communication dated 10.07.2004 (Annexure P-1), whereafter proforma respondent No.6 opened the retail outlet of petroleum product in the name and Style of M/s Ganpati H.P. Center Tarkawari, Tehsil Bhoranj (Hamirpur to Jahu Road), District Hamirpur, H.P. Unfortunately, in the year 2007, proforma respondent No.6 i.e. wife of petitioner No.1 suddenly fell ill and was diagnosed with brain tumour. Since on account of aforesaid disease, proforma respondent No.6 was unable to run the petrol pump as detailed hereinabove, therefore, by way of an application, a joint request came to be made on behalf of petitioner as well as proforma respondent No.6 for transfer of 100% share and dealership in the name of the petitioner, but fact remains that only share to the extent of 49% (Annexure P-7) vide communication dated 01.04.2011, was transferred in favour of the petitioner, whereafter agreement was executed inter se petitioner No.1 and respondent No.2.
On 24.10.2013, petitioner No.1 again sent a letter to respondent-Corporation for transferring 100% share of the retail-outlet/Petrol Pump Style M/s Ganpati H.P. Center, but in vain. Subsequently again on 9th January, 2015, petitioner No.1 addressed a letter to respondent-Corporation stating therein that as per the Revised Policy Guidelines, proforma respondent No.6 may be permitted to resign from the dealership and 100% share may be transferred in the name of petitioner No.1, however, such prayer of him remained pending consideration for long and vide show cause notice on 04.01.2018, respondent-Corporation called upon petitioner as to explain that why dealership granted in favour of proforma respondent No.6 be not cancelled on account of concealment of fact. In the aforesaid show cause notice, respondent-Corporation alleged that the factum with regard to appointment of proforma respondent No.6 on contract in the year 2009 was concealed. Though proforma respondent No.6 filed reply to the aforesaid show cause notice, wherein she admitted factum with regard to her appointment on contact with the Government Department in the year 2009, but stated that since she was suffering with the brain tumor and affairs of dealership was being looked after by his husband-petitioner, she was unable to communicate aforesaid factum. However, vide communication dated 08.10.2018, agreement dated 01.04.2011 executed inter se proforma respondent No.6 and respondent No.2, whereby dealership of the petrol pump in question was granted in favour of the proforma respondent No.6, came to be cancelled. 3. Being aggrieved and dissatisfied with the aforesaid order of termination, proforma respondent No.6 filed CWP No. 2518 of 2018, but same came to be disposed of vide order dated 30.10.2018 with liberty to the petitioner to file representation to respondent-Corporation with further direction to respondent-Corporation to decide the same within one month. Though, representation dated 04.12.2018, was filed by proforma respondent No.6 to the respondent-Corporation, but same came to be rejected vide order dated 11.12.2018. In the aforesaid background, petitioner has approached this Court in instant proceedings praying for reliefs as have reproduced hereinabove. 4. Pursuant to issuance of notices and proceedings, respondents No.2 to 5 have filed their reply, wherein facts as have been noticed hereinabove have not been disputed and stand admitted.
In the aforesaid background, petitioner has approached this Court in instant proceedings praying for reliefs as have reproduced hereinabove. 4. Pursuant to issuance of notices and proceedings, respondents No.2 to 5 have filed their reply, wherein facts as have been noticed hereinabove have not been disputed and stand admitted. It has been averred in the reply that since proforma respondent No.6 concealed factum with regard to the appointment on contract basis with the Government, but dealership of the petrol pump in question rightly came to be cancelled in terms of Clause 4 (C) Sub Clause 2 of the dealership agreement, which reads as under:- Faithful Performance The dealer undertakes faithfully and promptly to carry out observe and perform all directions and orders or rules made from time to time by the Corporation for the proper carrying on of the dealership. (b) It shall be the paramount condition of the agreement that the Dealer shall take active part in the management and running of the Dealership and shall personally supervise the same and shall not under any circumstances do so through any other person, firm or body. (c) Except with the previous written consent of the Corporation. (i) The Dealer shall not enter into any arrangement, contract or understanding whereby the operation of the dealership may be controlled/carried out and/or financed by any other person, film or Company, whether directly or indirectly and whether in whole or in part. (ii) The dealer shall not take up any other employment or engage in any other business apart from the operation of the Dealership which is the subject matter of the agreement. (iii) The Dealer (if it be a Firm or a co-operative Society) shall not effect any change in its constitution whether in the identity of its partners, members or in the share/share holding of any of them, or in the terms of the Deed of Partnership or of the Bye laws as the case may be, in the event of the death of any partner/member of a Firm/Cooperative Society which has been appointed as a dealer hereunder the surviving partners/members hereby agree to indemnify and keep indemnified the Corporation against any claims or demands which may be made by the heirs of the deceased partner member. 5.
5. Before case could be heard and decided on the basis of pleadings adduced on record, learned Senior Counsel representing the petitioner while making this Court peruse guidelines framed by respondent No.2 for reconstitution of retail-outlets/SKO-LDO dealerships dated 21.5.2018 (Annexure P-15) contended that though proforma respondent No.6 had been operating the petrol pump in question on the basis of Letter of Intent (LOI) granted by the firm, but even if at this stage she is considered to be unauthorized person, her case can be considered in light of the aforesaid policy, wherein it has been provided that unauthorized person allotted the dealership individually or in association with proprietors, if apply for re-reconstitution, can be permitted to run the dealership subject to certain penalties. 6. Mr. Sanjeev Bhushan, learned Senior Counsel representing the petitioner contended that though prior to passing of order of cancellation of the dealership, petitioner and proforma respondent No.6 had made a representation in terms of policy detailed hereinabove, praying therein for reconstitution, but such prayer of them was not accepted and dealership was cancelled on the allegation of concealment of factum, if any of Government Employment of proforma respondent No.6. He submitted that since policy taken note hereinabove provides for condoning of past actions, if any, petitioner would be content and satisfied in case direction is issued to the respondent-Corporation to consider and decide the case of the petitioner in light of aforesaid policy in time bound manner. 7. Sh. Nitin Thakur, learned counsel, representing respondent No.2 while fairly acknowledging the issuance of the policy in question submitted that in case, representation if any, is filed by the petitioner in terms of aforesaid policy, same shall be considered in accordance with law in time bound manner. 8. Before considering afore prayer made on behalf of the petitioner as well as by proforma respondent No.6, it would be apt to take note of policy sought to be relied upon by the petitioner. Guidelines for reconstitution of retail-outlet dated 21.5.2018 (Annexure P-15) reveals that Ministry of Petroleum in its meeting held on 21.5.2018 decided that Oil Marketing Companies (OMC’s) would frame their own guidelines in regard to re-constitution of Retail Outlet/SKO-LDO dealerships in view of competitive environment vis-a-vis private players to give flexibility in operation and enable them to have a level playing field.
Most importantly in the aforesaid meeting, Ministry of Petroleum clarified that policy in regard to SC/ST dealership should recognize the need to keep such dealerships protected. 9. Perusal of aforesaid policy in its entirety clearly suggests that it repeatedly came to be discussed in meeting that prayer, with regard to reconstitution, if any, remained pending and the same could not be decided on account of difficulties experienced by field agencies, one opportunity may be provided to such dealers for reconstitution or rectification of mistake, if any, committed in past. It would be apt to take note of following clauses of the policy i.e. re-constitution of pending cases reads as follows:- 1. Copy of Dealership agreement not available with dealer/OMC Most of these are old dealerships where dealership agreements are not traceable although other records like LOI, LOA, Reconstitution approval (Primary documents) or copy of RSL, etc. (Secondary documents) are available with OMC / Dealer which establish that the dealership had been awarded to the person(s) whose name is in such records. Such dealerships may be operated by the person(s) named in the documents or through their legal heirs. In such cases, dealership agreement would be signed with these persons (if they are alive) or with their legal heir(s) after following due process of reconstitution. An indemnity/ affidavit should be taken from the claimant/prospective dealer indemnifying Corporation against claim on dealership if the information is found incorrect. 2. Reconstitution proposal approved In past but dealership agreements not yet executed. There are cases where reconstitution proposals of the dealership were approved by OMC however the dealership agreement was not executed for various reasons. In such cases, the OMC would look into the reasons for non-execution of dealership agreement and if the same is found to be complied as on date or is not required to be complied in the present scenario (as per conditions in approval), then after necessary compliance by the dealership the agreement would be executed. In cases where the proprietor/partner(s) have expired since reconstitution, the dealership would be reconstituted with their legal heir(s) taking into consideration the earlier approved Reconstitution proposal. 3. Reconstitution not done due to non-availability/authenticity of legal heir(s) but is being operated by proclaimed legal heir(s).
In cases where the proprietor/partner(s) have expired since reconstitution, the dealership would be reconstituted with their legal heir(s) taking into consideration the earlier approved Reconstitution proposal. 3. Reconstitution not done due to non-availability/authenticity of legal heir(s) but is being operated by proclaimed legal heir(s). There are cases where reconstitution of the dealership was not done after the demise of the proprietor/partner(s) due to some reason and the legal heir(s) has been operating the dealership without any claim/dispute from other legal heirs for a very long time. OMCs have also by their conduct recognized the operation of the dealership through such legal heirls). In such cases OMC concerned will issue a suitable notice in the newspaper (cost of notice to be borne by the dealership) in this regard indicating that application has been received for reconstitution of the dealership in favour of applicants and seeking response/objection, if any, for such reconstitution by the concerned legal heir(s) within a time period of 30 days. In case no objection is received within the time period specified, the dealership would be reconstituted with the legal heir(s) operating the dealership after taking suitable indemnity from them. 4. Dealership being operated by one or more partners after exit/in prolonged absence of partner(s) from the dealership without approval of OMCs There are cases where Dealership is being operated by one or more partners after exit in prolonged absence of partner(s) from the dealership, without approval of OMCs. The dealership has been operating without any claim/dispute from the partner(s), who have exited from the dealership/have been absent for a very long time. OMCs have also by their conduct recognized the operation of the dealership through such remaining partner(s). In such cases OMC concerned will issue a suitable notice in the newspaper (cost of notice to be borne by the dealership) in this regard indicating that application has been received for reconstitution of the dealership in favour of applicants and seeking response/objection, if any, for such reconstitution from the concerned partner(s)/ their legal heir (if the partners) have expired) within a time period of 30 days. In case no objection is received within the time period specified, the dealership would be reconstituted with the remaining partners) operating the dealership after taking suitable TODAY Indemnity from them. 5.
In case no objection is received within the time period specified, the dealership would be reconstituted with the remaining partners) operating the dealership after taking suitable TODAY Indemnity from them. 5. Reconstitution not done due to dispute among partners after the death of one or more partner/s There are cases, where the reconstitution of the dealership could not be done due to dispute among partners. In such cases, OMC would send a notice to all partners calling them for personal hearing to resolve the dispute for operation/reconstitution of dealership and take an undertaking from the dealership confirming to resolve the dispute within 6 months. In case any partner(s) does not attend, personal hearing may be given to the attending partners However, action proposed to be taken would be sent to all the partners. Supplies to the Dealership would continue with the partners who are willing to indemnify the Corporation against any claim/eventuality. In case the dispute is not resolved within 6 months, the Surviving partners are to be given an option of "Holiday Scheme" to sort out their issues within reasonable time and revert back for dealership. 6. Constitution is currently in line with approved set up and past deviations have been rectified. There are cases where unauthorized persons had operated the dealership fully or in association with the proprietor/partner(s). However, the dealership has rectified or requested for rectification of the mistake and reverting to last approved set up. Such actions can be condoned by OMC on one time basis after taking a suitable undertaking from the dealer requesting for condoning the past actions and confirming understanding of the provisions of the agreement for compliance in future and issuance of letter of warning by OMC Such dealership would be required to pay penal fee of Rs. 2 lakhs. 7. Proposed constitution requires recognition of induction of an outside Partner In the past without approval of OMC There are cases where dealerships have inducted outside partner(s) without taking approval from OMMC. Upon request from the dealership, the proposal would be considered al Approval Upon reconstitution the dealership would have to pay the required penal fee of Rs. 5 lakhs and OMC would issue a letter of warning. 8.
Upon request from the dealership, the proposal would be considered al Approval Upon reconstitution the dealership would have to pay the required penal fee of Rs. 5 lakhs and OMC would issue a letter of warning. 8. Cases of Total change over in past where proposed constitution requires approval for induction of "family" member or blood relative of approved signatory There are cases where proprietor/partner(s) have given control of the dealership to their "family member" or "Blood Relative" without taking approval from OMC. List of blood relatives will be defined as per Section-56(2)(v) (Explanation) of Income Tax Act 1961 (permitting receipt of any sum of money from any "relative"), as under: Spouse of the individual- Brother or Sister of the individual Brother or Sister of the spouse of the individual Brother or Sister of either of the parents of the individual Any lineal ascendant or descendant of the individual Any lineal ascendant or descendant of the spouse of the individual Spouse of the persons referred in above six categories In such cases the person/s operating the dealership would make an application and provide complete details of the case requesting for condoning the past actions and confirming to abide by the provisions of dealership agreement for compliance in future. Upon request from the dealership, the proposal would be considered for approval. Upon reconstitution the dealership would have to pay the required penal fee of Rs. 5 lacs and OMC would issue a letter of warning. 10. Careful perusal of aforesaid policy clearly reveals that in cases, where unauthorized person had operated the dealership fully in association with proprietors/partners, can also make request for rectification of mistake and such action can be condoned by OMC on one time basis after taking suitable undertaking from the dealer requesting for condoning the past actions and confirming understanding of the provision of the agreement for compliance in future and issuance of letter of warning by OMC subject to penalty of repees two lakh. 11. It is not in dispute that at the first instance, dealership of the petrol pump in question was allotted in favour of proforma respondent No.6, wife of petitioner No.1 under SC category women. It is also not in dispute that subsequently on the request of proforma respondent No.6, 49% share was transferred in the name of the petitioner No.1.
11. It is not in dispute that at the first instance, dealership of the petrol pump in question was allotted in favour of proforma respondent No.6, wife of petitioner No.1 under SC category women. It is also not in dispute that subsequently on the request of proforma respondent No.6, 49% share was transferred in the name of the petitioner No.1. Though petitioner had made a request to transfer 100% share, because of illness of proforma respondent No.6 but such request of petitioner was not accepted. Though, after illness of proforma respondent No.6, petitioner kept on running the petrol pump being over all incharge, but dealership came be cancelled on the ground that factum with regard to employment of proforma respondent No.6 was not brought to the notice of respondent No.2-Corporation. 12. It is none of the case of the respondent-Corporation that factum with regard to the employment, if any, of respondent No.6, was concealed at the time of making application for reconstitution of petrol pump. Also, it is not in dispute, rather precise allegation against proforma responded No.6 was that she after transfer of 49% share in favour of petitioner No.1 failed to inform respondent-corporation that she has been appointed in Government Department on contract basis. Though, policy clearly reveals that after being granted dealership, person cannot take Government Job and acceptance, if any, may invite disqualification, but admittedly in the case at hand, prior to petitioner having accepted appointment on contract basis, 49% share in dealership stood transferred to petitioner. Be that as it may. Since policy dated 21.5.2018 was very much in existence at the time of issuance of letter dated 8th October, 2018 (Annexure-16), whereby dealership granted in favour of the proforma respondent No.6 came to be cancelled, prayer made on behalf of the petitioner to permit him to make representation in terms of aforesaid policy enabling respondent-corporation to reconsider the matter deserves to be allowed. Consequently, in view of the above, present petition is disposed of reserving liberty to the petitioner as well as proforma respondent No.6 to file representation to respondent-Corporation in terms of policy dated 21.5.2018 for redressal of their grievance within a period of two weeks, which in turn shall be decided by respondent No.2, expeditiously, preferably within a period of eight weeks strictly in terms of the policy as taken note hereinabove.
Needless to say that authority concerned while doing the needful shall afford an opportunity of hearing to the petitioner and thereafter pass a speaking order. Liberty is reserved to petitioner to file appropriate petition in the appropriate Court of law, if he still remains aggrieved. Needless to say that respondent-corporation while considering representation, if any, made by the petitioner or proforma respondent No.6 shall not be influenced by the order of cancellation dated 8th October, 2023, rather claim of petitioner shall be strictly considered and decided in terms of policy as detailed hereinavove.