Gujarat High Court
Prabhudas Mafatlal Parekh vs Indian Oil Corporation on 27 June, 2016
Author: S.H.Vora
Bench: S.H.Vora
C/SCA/9975/2016 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 9975 of 2016
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PRABHUDAS MAFATLAL PAREKH....Petitioner(s)
Versus
INDIAN OIL CORPORATION....Respondent(s)
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Appearance:
MR C B UPADHYAYA, ADVOCATE for the Petitioner(s) No. 1
MR MR BHATT, SR. ADVOCATE with MRS MAUNA BHATT, CAVEATOR for
the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE S.H.VORA
Date : 27/06/2016
ORAL ORDER
1. Notice for final disposal. Learned advocate Mrs. Mauna appears on caveat and waives service of notice for the respondent. With the consent of learned advocates for respective parties, the matter is taken up for final disposal today.
2. By way of this petition under Article __ of the Constitution of India, the petitioner made following prayers.
"(B). This Hon'ble Court may kindly be pleased to issue writ of mandamus and/or any other writ/order/direction to direct the respondent to quash and set aside the Termination Letter dated 17.6.2016 terminating the distributorship entered into 1994 and continued till date.
(C). That this Hon'ble Court may kindly be pleased to stay the effect, implementation and execution of the Termination Letter pending this petition."Page 1 of 5
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3. Briefly stated, the petitioner was allotted distributorship of gas agency way back in 1994 in pursuance of written distributorship agreement entered and executed between the parties on 31.3.1994. The petitioner was operating LPG distributorship under freedom fighter category at Bhavnagar in the name and style of M/s Yogikrupa Gas Agency and on the basis of on-line annul return, various documents which were required to be uploaded by the petitioner, were verified by the respondent corporation as per the Rules and based on such document, the respondent corporation issued show cause notice dated 20.2.2016 and observed following discrepancies.
"A. Current Bank Account No.66008923157 at SBI Shashtrinagar, Bhavnagar Branch is operative in the name of M/s Yogikrupa Gas Agency, Bhavnagar in name of proprietor Shri Prabhudas Mafatlal Parekh. However, the certificate of person operating the bank account obtained from the SBI bank reference SL/61 dated 26.10.2015 shows that account is operated by the power of attorney in name of Shri Dilipbhai Prabhudas Parekh, who is not a signatory of distributorship agreement as per available records which is clear cut violation of distributorship agreement under clause number 23 b), c).
B. While verifying documents for Show Room, it is observed that Showroom, which is situated at shop No.21 and 22, Madhav Complex, Opp - Vijaraj Nagar, Shashtrinagar, Bhavnagar is sold to one person named Shri Satyadevsinh Krushndevsinh Jadeja vide document No.4447 and 4448 dated 7.12.2009. The person mentioned as Shri Satyadevsinh Krushndevsinh Jadeja is not a signatory of distributorship agreement with IOCL.
The shop is sold to the person thru power of attorney made in the name of Shri Satyadevsinh Krushndevsinh Jadeja by Shri Prabhudas Mafatlal Parekh vide the power of attorney reference 7402/2009 dated 22.10.2009.
C. Firm M/s Yogikrupa Gas Agency, Bhavnagar has been registered as as partnership firm vide registration of firms vide Application No.387/2009/2010. The name of partners appearing in the ROF is 1. Shri Prabhudas Mafatlal Parekh
2. Shri Atul Himmatlal Shah. As per IOCL records, the firm is proprietorship firm and induction of partner in the firm M/s Yogikrupa Gas Agency, Bhavnagar has been carried out without prior written approval of IOCL which Page 2 of 5 HC-NIC Page 2 of 5 Created On Wed Jun 29 03:06:58 IST 2016 C/SCA/9975/2016 ORDER is clear cut violation of distributorship agreement under clause number 21, 23 b) and 23 c)."
4. In response to the said show cause notice, the petitioner gave reply to the respondent on 11.3.2016.
5. Thereafter, the respondent by impugned order dated 17.6.2016 came to the conclusion that the bank account of the gas agency was operated by one power of attorney holder and he was not the signatory of the distributorship agreement. The show room, in which gas agency was run came to be sold to one Mr. Satyadevsinh Krushndevsinh Jadeja and further, the petitioner inducted one Mr.Atulbhai Himmatbhai Shah as partner without the permission of the respondent and accordingly, the respondent terminated the agreement with immediate effect for violation of clause Nos.21, 23(b) and 23(c) of the distributorship agreement dated 31.3.1994.
6. Having heard the submissions made at bar, learned advocate Mr. Upadhyaya for the petitioner would contend that the respondent has not extended any opportunity to the petitioner before passing the impugned order. According to him, the grounds of show cause notice shown were duly replied with justifiable explanation and therefore, there was no reason on the part of the respondent to take extreme steps. In support of his submissions, learned advocate Mr. Upadhyaya has pressed into service decision rendered in case of Sushila Kumar Vs. Indian Oil Corporation Limited and others reported in (2014) 14 SCC 411 and more particularly, para 15 thereof. In the said case before the Hon'ble Apex Court, the appellant took 14 visit to New Zealand in a span of 13 years as her only daughter was residing at New Zealand at Page 3 of 5 HC-NIC Page 3 of 5 Created On Wed Jun 29 03:06:58 IST 2016 C/SCA/9975/2016 ORDER the relevant time. According, the Hon'ble Apex Court found and observed that such absence of short term duration cannot lead to an inference that the appellant has abandoned the distributorship or that she will not be able to effectively perform the task of supply of LPG to the consumers. In case on hand, the factual facts are altogether different and distinct. It is an admitted fact that the petitioner appointed power of attorney though his son to operate the bank account and he is not a signatory of the distributorship agreement and such appointment of power of attorney holder was without prior permission and also without any medical evidence of illness of the petitioner. Secondly, the showroom wherein the distributorship was run/operated by the petitioner came to be sold out to one Mr. Satyadevsinh Krushndevsinh Jadeja vide document Nos.4447 and 4448 dated 7.12.2009. The said person was not a signatory of the distributorship agreement with the respondent nor any permission was obtained from the respondent corporation. In addition to it, the petitioner has also introduced one partner, namely Mr. Atulbhai Himmatlal Shah and thus, converted proprietary-ship firm into partnership firm without prior written approval of the respondent and thus, committed clear cut violation of the clause Nos. 21, 23(b) and 23(c) of the distributorship agreement.
7. Learned senior advocate Mr. M.R. Bhatt pressed into service the decision in case of Hindustan Petroleum Corporation Ltd. Vs. Sri Sriman Narayan and others reported in AIR 2002 SC 2598, wherein the Hon'ble Apex Court found violation of the terms of the agreement by the plaintiff changing the structure of the firm without permission of the Page 4 of 5 HC-NIC Page 4 of 5 Created On Wed Jun 29 03:06:58 IST 2016 C/SCA/9975/2016 ORDER corporation is an illegal act and therefore, grant of interim injunction was unsustainable and accordingly, appeal preferred by the HPCL was allowed.
8. So, looking to the overall facts and circumstances of the case, the Court do not find any reason to interfere with the impugned order as the petitioner has committed breach of distributorship agreement and committed breach of clause Nos.21, 23(b) and 23(c) and therefore, there is no substance in the petition warranting interference at the hands of this Court and the same stands dismissed. Notice discharged.
(S.H.VORA, J.) shekhar Page 5 of 5 HC-NIC Page 5 of 5 Created On Wed Jun 29 03:06:58 IST 2016