Calcutta High Court (Appellete Side)
M/S. Begampur Indane Gramin Vitrak & Ors vs Indian Oil Corporation Limited & Ors on 11 May, 2026
11.05.2026
ct no. 10
Sl. 06
AGM
WPA 4012 of 2026
M/s. Begampur Indane Gramin Vitrak & Ors.
-Versus-
Indian Oil Corporation Limited & Ors.
Mr. Surajit Nath Mitra, Sr. Advocate.
Mr. Ramesh Dhara
Mr. Gourav Banerji
...for the petitioner
Mr. Amit Kumar Nag,
Mr. Parth Banerjee
Ms. Rishita Sarkar.
...for the OICL (Respondent No. 1 to 5)
Mr. Sorbananda Syanal
Mr. Hamidur Rahaman
...for the Private Respondent No.6
1. The petitioners seek a writ of certiorari to
quash the speaking order dated 21.01.2026
passed by the competent authority being the
respondent no. 4 herein. The impugned order
confirms the revocation of approval for the
reconstitution of the partnership firm in
respect of the petitioners' distributorship,
primarily on the ground of failure to execute
the formal distributorship agreement.
2. The petitioners in the instant case prays inter
alia, for the following reliefs:
"a) Declaration declaring Clause 3.17.12 of
Guideline of May 202 of Indian Oil
corporation Limited, being contrary to and
dehors the 1932 Act, be declared null and
void;
b) A writ of and/or in the nature of
Mandamus Commanding the respondents
IOCL to withdraw and/or rescind and/or
2
cancel the impugned memo dated 22nd
January 2026, forthwith;
c) A Writ of and/or in the nature of
Certiorari calling upon the respondents
IOCL and each of them to certify and
transmit the records of the case
culminating in impugned memo dated 22nd
January 2026, so that upon perusal
thereof, conscionable justice may be
rendered to the petitioners by quashing the
same:
d) A Writ of and/or in the nature of
Prohibition, prohibiting the IOCL authority
from giving any effect and/or further effect
to the impugned memo dated 22nd January
2026, in any manner whatsoever;
e) Direction directing the IOCL to conclude
the reconstitution process in terms of
approval order dated 21st February 2024,
forthwith;
f) Rule N I S I in terms of prayer (a), (b), (c),
(d) and (e) above and to make the Rule
absolute if no cause or insufficient cause is
shown;
g) An interim order of injunction
restraining the respondent authorities
from giving any effect and/or further effect
to the impugned memo dated 22nd January
2026, in any manner whatsoever;
h) Stay of operation of the impugned memo
dated 22nd January 2026;
i) Ad interim order in terms of prayers (g)
and (h) above;
j) costs and incidental arising out of the
instant petition;
k) Such other or further order or orders as
to Your Lordships may deem fit and
proper."
3. Apropos the facts of the case, it is stated that
the respondent no. 6 herein is the sole
proprietor of a firm under the name and style
of M/s. Begumpur Indane Gramin Vitrak.
4. The licence has been granted by Indian Oil
Corporation Ltd., being the respondent No. 1
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herein by executing an agreement on
06.07.2020 for running the LPG
distributorship business. However, upon
facing several problems in operating the same,
mainly due to financial constraints,
respondent No. 6 submitted a representation
to respondent No. 1 on 06.10.2023 seeking
reconstitution of the said business from a
proprietorship to a partnership by inducting
petitioner Nos. 2 to 4 as partners in the said
LPG distributorship business.
5. Thereafter, the representation of the
respondent No. 6 has been considered by the
respondent No. 1 at a meeting held on
17.01.2024 wherein the respondent No. 6
expressed her willingness to continue running
the said LPG business and requested the
officials of the respondent No. 1 to induct the
petitioner Nos. 2 and 4 as partners for the
smooth running of the business.
6. Accordingly, a proposed partnership deed has
been executed amongst the petitioner Nos. 2
to 4 and the respondent No. 6 along with an
affidavit.
7. The respondent No. 6 also executed an
affidavit stating her willingness to induct the
petitioner Nos. 2 to 4 as partners, declaring
inter alia, that she has no objection to
respondent No. 1 permitting of the said LPG
4
distributorship firm from proprietorship to
partnership.
8. The reconstitution of the said LPG
Distributorship business from a proprietorship
to partnership has been approved on 21st
February 2024.
9. Thereafter, respondent No. 1 requested the
respondent No. 6 to submit the relevant
documents for completing reconstitution
process and accordingly, the said documents
have been submitted.
10. For the purpose of reconstitution, the
relevant statutory licences required for
running the said business has also been duly
obtained from the respective authorities in the
name of the partnership firm on 13.03.2025
valid upto 31.12.2025, after cancelling the
proprietorship licence standing in the name of
respondent No. 6. By virtue of the licences so
granted, the respondent No. 1 permitted the
continuance of the said LPG distributorship
on a partnership basis and continued to
supply LPG cylinders to the petitioners.
11. On 11th June 2025, during the
pendency of the reconstitution, the husband of
the respondent No. 6 lodged a complaint
before the concerned police authorities
regarding shortage of cylinders from the LPG
godown. Cognizance has been taken pursuant
5
to the order of this court dated 15th July 2025
passed in WPA No. 13845 of 2025.
12. Thereafter, on 26th August 2025, the
respondent No. 1 suspended the LPG
distributorship on the ground of expiry of the
statutory licence granted in favour of the
proprietorship firm.
13. The respondent No. 1, by a Memo dated
19th November 2025 revoked the in-principal
approval for reconstitution for the LPG
distributorship by invoking clause 3.17.12 of
the guidelines of the respondent No. 1 of May
2022 without affording any opportunity of
hearing to the petitioner.
14. The petitioners contend that the
reconstitution approval order dated 21st
February 2024 has been revoked by a Memo
dated 19th January, 2025 which has been
confirmed by an Order dated 22nd January,
2026 and the same is arbitrary and perverse
having been passed without proper application
of mind.
15. The respondent No. 1 has acted
arbitrarily without giving any cogent reason,
despite having approved the induction of
petitioner Nos. 2 to 4 as partners of petitioner
No. 1.
16. The petitioner submit that, in
compliance with the in-principal letter dated
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21.02.2024, all relevant documents have been
submitted to complete the reconstitution
process.
17. Despite submission of such relevant
documents, respondent No. 6, being the
erstwhile proprietor of the firm, refused to sign
the distributorship agreement pursuant to the
revised reconstitution. The petitioner submits
that until the date of the order of suspension,
the respondent No. 1 continued to supply LPG
cylinders to the petitioners.
18. The petitioner submits that by virtue of
the order of approval dated 21st February
2025, a right has been accrued in favour of
the petitioners to run the LPG distributorship
business, since all the statutory licences have
been issued in the name of the partnership
firm.
19. It is submitted that an order of approval
can be cancelled or withdrawn only in a case
where a partner of the partnership firm makes
any misrepresentation or suppresses any
material facts with regard to the reconstitution
of the LPG distributorship from proprietorship
to partnership. In the instant case, no such
occasion arose for suppression or
misrepresentation of any fact arose and hence
there exists no ground for cancellation of the
order of approval.
7
20. The petitioners submit that the minutes
dated 15.01.2026 being Annexure "P-21" at
page 165, Clause 8, paragraph 4 (H, I and K),
demonstrate that none of the licences
submitted before the respondent No. 1 have
been reverted back to the proprietorship firm.
The clause H, I and K are reproduced below:
"h) Kabita Mandal was asked by the
corporation to clearly specify whether her
claims towards submission of
reconstitution requiest earlier was out of
ignorance which has informed in her
earlier letter or due to back mailing which
she is presenting in this meeting. No firm
response was provided by Ms. Kabita
Mandal to this question.
i) Ms. Kabita Mandal had complained to
IOCL as well as enforcement authorities
regarding alleged theft of cylinders from
her distributorship godown by Mr. Nimai
Mondal, Mr. Mahamaya Kabiraj & Mr.
Pashupati Mondal. The incoming parters in
this context submitted the court order
dated 03.12.2025 reg: GR-3212/2025 by
AJM, Lalbagh Murshidabad for dismissal of
the accused in this case. Ms. Kabita
Mandal further submitted that she has
appealed to higher court against this order
of Lalbagh court.
k) Ms. Kabita Mandal was asked about the
status of conversion of various licences
following issued of IOCL's letter dated
19.11.2025 revoking the in-principle
approval to reconstitution to which she
replied that none of the licences have been
reverted yet. Finally, both parties were
asked to give their final submissions to
which they repeated the above points."
8
21. The Learned Counsel appearing for the
respondent No. 1 vehemently opposes the
contention of the petitioners and submits that,
till the date of the order of suspension no LPG
cylinders have been supplied to the
partnership firm. The order of suspension has
been issued in the name of the proprietorship
firm instead of the partnership firm.
22. It is further submitted that since the
reconstitution has not been completed by
execution of the distributorship agreement,
the impugned order does not suffer from any
infirmity and is a well reasoned speaking
order. The clause 3.17.12 of the reconstitution
policy (May 2022) clearly envisages that unless
the new distributorship agreement is signed,
respondent No. 1 can cancel the in-principal
letter and forfeit the application fees. The
extracts of the clause 3.17.12 of the
reconstitution policy is reproduced below:-
i) "Cases where in-Principle letter for
reconstitution is issued by OMC and new
Distributorship agreement is not signed, the
IMC may agree to accept request from
signatories of the existing distributorship
agreement to cancel the In-Principle letter
aid for felt the application fees, if any.
Changes made in statutory licenses shall be
9
reverted back and the proprietor/partner(s)
shall indemnity the OMC against any claims
or demands."
ii) "By virtue of the said clause in-principal
approval dated 21.02.2024 has been revoked
and the reconstitution process has been
cancelled by imposing a penalty to the tune
of Rs. 12,13,289.2 for equipment shortages
and irregularities."
23. It is submitted by the petitioners that all
substantial requirements have been fulfilled
for the reconstitution of the firm as per the
guidelines dated 9.6.2020.
24. The failure to sign the distributorship
agreement is attributable to the unwillingness
of respondent No. 6, being the original license
holder to complete the reconstitution process.
25. The revocation is the disproportionate to
the alleged lapse. The petitioners submit that
mere delay in signing a document should not
lead to the civil death of the business. It is
further contended that the competent
authority, while passing the speaking order in
pursuant to the earlier directions given by the
Coordinate Bench of this Court failed to
consider and appreciate the merits of the
petitioners' explanation.
26. Per contra, the learned counsel
appearing for the respondent/oil company
submits that the execution of the
10
distributorship agreement is a mandatory
condition precedent for the recognition of any
reconstituted partnership.
27. Under the policy, approvals for
reconstitution are conditional. Failure to
execute the distributorship agreement within
the stipulated period leads to automatic
lapse/revocation, as per Clause 3.17.12 of the
guidelines dated May 2022. It is expressly
provided that if the new distributorship
agreement is not signed, the OMC may agree
to accept request from signatories of the
existing distributorship agreement to cancel
the in principle letter and forfeit the
application fees, by the reverting the statutory
licenses in favour of the original license
holder. The respondent submits that multiple
reminders have been sent both to the
petitioners and the private respondent, but the
same remained unheeded, thereby
necessitating the revocation to protect the
commercial interest of the corporation. The
learned counsel appearing for the respondent
no. 1 to 5 relies upon the following judgments-
Tata Cellular-vs- Union of India reported in
(1994) 6 SCC 651-
"73. Observance of judicial restraint is currently the
mood in England. The judicial power of review is
exercised to rein in any unbridled executive functioning.
The restraint has two contemporary manifestations.
11
One is the ambit of judicial intervention; the other
covers the scope of the court's ability to quash an
administrative decision on its merits. These restraints
bear the hallmarks of judicial control over
administrative action.
74. Judicial review is concerned with reviewing not
the merits of the decision in support of which the
application for judicial review is made, but the decision-
making process itself.
75. In Chief Constable of the North Wales
Police v. Evans [(1982) 3 All ER 141, 154] Lord
Brightman said:
"Judicial review, as the words imply, is not an
appeal from a decision, but a review of the manner
in which the decision was made.
***
Judicial review is concerned, not with the decision, but with the decision-making process. Unless that restriction on the power of the court is observed, the court will in my view, under the guise of preventing the abuse of power, be itself guilty of usurping power."
In the same case Lord Hailsham commented on the purpose of the remedy by way of judicial review under RSC, Ord. 53 in the following terms:
"This remedy, vastly increased in extent, and rendered, over a long period in recent years, of infinitely more convenient access than that provided by the old prerogative writs and actions for a declaration, is intended to protect the individual against the abuse of power by a wide range of authorities, judicial, quasi-judicial, and, as would originally have been thought when I first practised at the Bar, administrative. It is not intended to take away from those authorities the powers and discretions properly vested in them by law and to substitute the courts as the bodies making the decisions. It is intended to see that the relevant authorities use their powers in a proper manner (p. 1160)."12
In R. v. Panel on Take-overs and Mergers, ex p Datafin plc [(1987) 1 All ER 564] , Sir John Donaldson, M.R. commented:
"An application for judicial review is not an appeal."
In Lonrho plc v. Secretary of State for Trade and Industry [(1989) 2 All ER 609] , Lord Keith said:
"Judicial review is a protection and not a weapon."
It is thus different from an appeal. When hearing an appeal the Court is concerned with the merits of the decision under appeal. In Amin, Re [Amin v. Entry Clearance Officer, (1983) 2 All ER 864] , Lord Fraser observed that:
"Judicial review is concerned not with the merits of a decision but with the manner in which the decision was made.... Judicial review is entirely different from an ordinary appeal. It is made effective by the court quashing the administrative decision without substituting its own decision, and is to be contrasted with an appeal where the appellate tribunal substitutes its own decision on the merits for that of the administrative officer."
76. In R. v. Panel on Take-overs and Mergers, ex p in Guinness plc [(1990) 1 QB 146 : (1989) 1 All ER 509] , Lord Donaldson, M.R. referred to the judicial review jurisdiction as being supervisory or 'longstop' jurisdiction. Unless that restriction on the power of the court is observed, the court will, under the guise of preventing the abuse of power, be itself guilty of usurping power.
77. The duty of the court is to confine itself to the question of legality. Its concern should be:
1. Whether a decision-making authority exceeded its powers?
2. Committed an error of law,
3. committed a breach of the rules of natural justice,
4. reached a decision which no reasonable tribunal would have reached or, 13
5. abused its powers.
Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:
(i) Illegality : This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it.
(ii) Irrationality, namely, Wednesbury unreasonableness.
(iii) Procedural impropriety.
The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in R. v. Secretary of State for the Home Department, ex Brind [(1991) 1 AC 696] , Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, "consider whether something has gone wrong of a nature and degree which requires its intervention".
Balco Employees' Union (Regd.) -vs- Union of India & Ors. (2002) 2 SCC 33-
"57. Even though the employees of the company may have an interest in seeing as to how the Company is managed, it will not be possible to accept the contentions that in the process of disinvestment, the principles of natural justice would be applicable and that the workers, or for that matter any other party having an interest therein, would have a right of being heard. As a matter of good governance and administration whenever such policy decisions are taken, it is desirable that there should be wide range of consultations including considering any representations which may have been filed, but there is no provision in law which would require a hearing to be 14 granted before taking a policy decision. In exercise of executive powers, policy decisions have to be taken from time to time. It will be impossible and impracticable to give a formal hearing to those who may be affected whenever a policy decision is taken. One of the objects of giving a hearing in application of the principles of natural justice is to see that an illegal action or decision does not take place. Any wrong order may adversely affect a person and it is essentially for this reason that a reasonable opportunity may have to be granted before passing of an administrative order. In case of the policy decision, however, it is impracticable, and at times against the public interest, to do so, but this does not mean that a policy decision which is contrary to law cannot be challenged. Not giving the workmen an opportunity of being heard cannot per se be a ground of vitiating the decision. If the decision is otherwise illegal as being contrary to law or any constitutional provision, the persons affected like the workmen, can impugn the same, but not giving a predecisional hearing cannot be a ground for quashing the decision."
28. The learned counsel appearing for the respondent no. 6 submits that she has been coerced into signing documents relating to reconstitution and conversion of statutory licenses. It is further submitted that, without her consent and taking advantage of her ignorance, the petitioners being caretakers of the proprietorship firm blackmailed and compelled her to sign the relevant documents submitted before the competent authority for reconstitution. It has been further submitted that the petitioners have also been involved in theft of LPG Cylinders from the godown, in 15 respect of which a complaint has been lodged and criminal cases has been initiated against the petitioners. The learned counsel appearing for the respondent no.6 relies upon the judgment State of UP & Ors. Vs. Bridge and Roof Co. (India) Ltd. Reported in (1996) 6 SCC 22 on the proposition of dismissal of writ petition on the ground of availability of effective alternative remedy wherein it has been held that the contract between the parties not being a statutory contract is in the realm of private law.
In M/S Bimala Gas Services & Anr. Vs. Indian Oil Corporation Limited (WPA/12206W/2014) the Hon'ble Coordinate Bench was pleased to hold in this case that reconstitution is a conditional process subject to strict adherence to Oil Marketing Company (OMC) guidelines, including verification of documents, eligibility of partners and previous written approval for any changes from the sole proprietor for entering into the distributorship license.
In Monmohan Dutta & Anr. Vs. Bharat Petroleum Corporation Ltd & Ors. Reported in 2023 SCC Online Cal 2225-
"28. For the reasons as aforesaid this Court is of the considered view that a writ of mandamus cannot be issued directing BPCL to renew the LPG distributorship agreement 16 on the signature of the appellants alone. The appellants do not have any right to carry on the distributorship business to the exclusion of the 9th respondent. BPCL cannot be directed to continue its supplies in the absence of a valid distributorship agreement. In view thereof this Court holds that BPCL was justified in issuing the letter dated 26.09.2022 to suspend supplied to the distributorship."
29. In this context, the petitioners vehemently opposes the same and submit that in respect of the allegations made by respondent No. 6 regarding coercion/blackmail, no FIR or criminal case alleging such coercion or blackmail have been filed by the respondent no. 6 against such alleged offences.
30. In conspectus of the above adumbrated herein, I find that the decision in the impugned order dated 21.01.2026 taken by the respondent no. 4 is a well reasoned speaking order and does not suffer from any infirmity. The petitioners have already invoked the arbitration clause as embodied in the Reconstitution Policy of LPG distribution.
31. The court does not sit as a court of appeal to apprise evidence or substitute its own opinion for that of the administrative authority. The role of the court is limited to 17 examine the decision making process and not the merits of the decisions.
32. The scope of the judicial review in the present matter is circumscribed, inasmuch as the issues involve complex questions of policy and technical considerations pertaining to the grant of LPG distributorship. However, it is trite law that judicial review is not ousted where the action of the State is arbitrary, irrational, or in violation of the principles of natural justice.
33. The petitioners challenge to the order of confirming the revocation of the in-principal approval, is premature. The reconstitution of the firm from a proprietorship to a partnership has not attained finality since the revised distributorship agreement remains unexecuted. Although the names of the partners have been incorporated in the requisite statutory licences submitted for the purpose of reconstitution, the licences continued to stand in the name of the proprietorship of Respondent No. 6.
34. Having heard the parties and upon careful perusal of records, this court is of the considered view that the competent authority has rightly exercised its discretion in confirming the revocation of the in-principal approval by way of a speaking order. The 18 petitioners have failed to adhere to the stipulated timeline despite multiple reminders issued by the respondent corporation.
35. In view of the above the Writ Petition being WPA No. 4012 of 2026 is dismissed. No order as to costs.
36. Urgent photostat certified copy of this order, if applied for, be given to the learned counsel for the parties on usual undertakings.
(Smita Das De, J.)