Calcutta High Court
M/S. Shree Niwas Ramgopal & Others vs The Director Of Consumer Goods & Others on 15 June, 2010
Author: Indira Banerjee
Bench: Indira Banerjee
WP No. 758 of 2010
IN THE HIGH COURT AT CALCUTTA
ORIGINAL JURISDICTION
M/s. Shree Niwas Ramgopal & Others
Versus
The Director of Consumer Goods & Others
Before:
The Hon'ble Justice Indira Banerjee
Date: 15th June 2010
Mr. Shakti Nath Mookherjee, Sr. Advocate
Mr. K. Gupta, Advocate
appear for the petitioners
Mr. Arun Kumar Deb, Advocate
Mr. Dipak Das, Advocate
appear for the State
Mr. Supriya Chottopahdyay, Advocate
Mr. Sudip Moitra, Advocate
appear for the respondent no.8
No one has appeared on behalf of the Indian Oil Corporation. This writ application is directed against the alleged refusal of the respondent-authorities to renew the kerosene agency licence to enable the petitioners to continue their business in dealership of kerosene.
One Kanhaiyalal Santhalia (since deceased) was the proprietor of the firm M/s. Shree Niwas Ramgopal. The petitioners are the sons of Late Kanhaiyalal Santhalia.
2
The proprietorship concern M/s. Shree Niwas Ramgopal of which Kanhaiyalal Santhalia (since deceased) was the proprietor had been granted Super Kerosene Oil (SKO) Licence under the West Bengal Kerosene Control Order, 1968.
The said Kanhaiyalal Santhalia (since deceased) during his life time inducted two of his sons being the petitioner nos. 2 and 3 herein as partners in his business of dealership in kerosene and a deed of partnership dated 24th November 1989 was executed. By a letter dated 8th June 1990 the Indian Oil Corporation approved the reorganisation of the business from sole proprietorship business to partnership with Shri Kanhaiyalal Santhalia (since deceased) and the petitioner nos. 2 and 3 as partners.
The partnership deed which was apparently approved by the Indian Oil Corporation inter alia provided as follows:
"18) 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 then be agreed upon."3
A fresh Memorandum of Agreement was executed between the Indian Oil Corporation and the partnership firm represented by their respective partners. The agreement with Indian Oil Corporation was signed by all the three partners, namely, Kanhaiyalal Santhalia and the petitioner nos. 2 and 3. The agreement between Indian Oil Corporation and the partnership firm inter alia provided as follows:
"... In the event of the death of any of the partners, the dealer shall immediately inform the Corporation giving the necessary particulars of the heirs and legal representatives of the deceased partner and it shall be the option of the Corporation either to continue the dealership with the said firm or to have a fresh dealership with any reconstituted firm or to terminate the dealership agreement and the decision of the Corporation in that behalf shall be final and binding on all the parties concerned"....
Indian Oil Corporation being a government company and State within the Article 12 of the Constitution of India cannot arbitrarily exercise its discretion to continue the dealership with the firm or to have fresh agreement of dealership with reconstituted firm or to terminate the agreement. The exercise of discretion would have to be fair, and supportable by reasons.
From the correspondence on record it appears that the petitioners have, on their part, informed the Indian Oil Corporation of 4 the death of their father and also supplied Indian Oil Corporation with the necessary particulars of the heirs and legal representatives of the deceased partner.
The interest of the heirs of the deceased partner to the extent of the share of the deceased partner in the partnership business as on the date of his death, is required to be protected. Having regard to the nature of the deed of partnership, read with the agreement of the partnership firm with Indian Oil Corporation, the legal heirs cannot interfere with the business of the partnership firm in any manner whatsoever.
By a letter dated 12th March 2010 the petitioners were allowed continuation of the temporary operation till 14th June 2010. The petitioners were also advised to submit the requisite document for reconstitution of the partnership firm which the petitioners claim to have done. Out of 12 legal heirs of Late Kanhaiyalal Santhalia, all except the two legal heirs impleaded as private respondent have accorded their no objection to continuance of the partnership business by the surviving partners. However, by the impugned letter dated 31st May 2010 Indian Oil Corporation has called upon the private respondents to apply for their respective shares in the dealership. The validity of the token permitting the petitioners to carry on business has not been extended, possibly in view of objection of the private respondents herein. 5
There will be an interim order directing the respondent- authorities to further extend the validity of the token pending final decision. The petitioners shall, however, keep an amount equivalent to the share of Kanhaiyalal Santhalia (Since deceased) in the partnership business in a separate account. The petitioner shall furnish the private respondents with the Statement of Accounts of the business till the date of death of Late Kanhaiyalal Santhalia.
Affidavit-in-opposition be filed within two weeks from date; reply thereto, if any, be filed within one week thereafter. The matter be listed as "Adjourned Motion" four weeks hence.
It is made clear that this interim order is without prejudice to the rights and contentions of the parties.
All parties are to act on a signed photostat copy of this order on the usual undertakings.
(Indira Banerjee, J.) R. Bose A.R.(CR)