Orissa High Court
Unknown vs Heard Mr. Ashok Parija on 28 June, 2018
Author: S. K. Mishra
Bench: S. K. Mishra
W.P.(C) No.10867 of 2018
- 02. 28.06.2018 W.P.(C) No.10867 of 2018
and
I.A. No.9023 of 2018
Heard Mr. Ashok Parija, learned Senior Advocate
appearing for the petitioners, learned Senior Advocate who
represents and appears in caveat petition having been engaged
by Mr. B.K. Nayak-I, learned Senior Advocate appearing for the
Caveator and the learned counsel for the State of Odisha i.e.
the opposite party no.2.
Copies of the writ petition and the I.A. have already
been served on the learned counsel for the Caveator.
The petitioner no.1 represented by the petitioner no.2
is a franchise holder under the opposite party no.1-Central
Electricity Supply Utility of Odisha (hereinafter referred to as
"the CESU" for brevity).
The petitioners, in essence, pray to renew the existing
distribution franchise agreement or enter into a fresh
distribution franchise agreement of their company. The
petitioners have also made some consequential reliefs. It is not
disputed at this stage that the duration of the Franchise
Agreement is for a period of sixty months and executed on 30th
January, 2013. The Franchise Agreement i.e. Annexure-1 to the
writ petition has also a provision for New Agreement beyond
five years which reads as follows:
"Depending on the performance of the DF,
CESU may consider to negotiate a new contract on
mutually agreed terms and conditions. The DF
will have to apply formally in writing for new
contract at least 18 (eighteen) months prior to the
expiry of the Franchise Agreement."
Thus, in pursuance to this agreement, the petitioners
submitted a proposal for extension of term of DFA executed for
2
AED/CED/SED/NMED under Annexure-4 series. The
opposite party no.1 made a communication with regard
to further course of actions on the franchisee operations in
CESU to the petitioners vide Annexure-6 on 13.12.2017 and
insisted upon inclusion of certain additional terms and
conditions. The petitioners accepting most of the additional
points and suggestions given to them under Annexure-6
submitted their response vide Annexure-7. By virtue of
Annexure-8, the opposite party no.1 on 29th January, 2018,
extended the Distribution Franchise Agreement period for five
months till 30.06.2018 with existing terms and conditions of
the DFA along with specific targets on (i) arrear collection,
disconnection, reconnection, meter replacement and 100 %
AMR for HT consumers etc (a letter with targets to be sent
separately) and (ii) continuous consumer service without any
disruption. By virtue of Annexure-10, the opposite party no.1
again specified the targets as specified under Annexure-8 and
issued the letter for extension of DFA period of DFA signed on
30.01.2013 for two divisions under Cuttack Circle and one
division under Bhubaneswar circle-I till 30.06.2018.
At present the CESU Management Board has taken a
decision not to renew the franchise of the petitioners and to
allow the same to other franchise holder to operate in the areas
in question. During the course of very lengthy argument, it is
argued with much emphasis by learned Senior Advocate for the
Caveator that the performance of the present petitioners is so
bad. Learned Senior Advocate also relies upon the decision of
the Hon'ble Supreme Court in the case of Union Territory of
Pondicherry and others -vrs.- P.V. Suresh and others: (1994)
2 SCC 70. In the case of P.V. Suresh (supra), it was urged
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before the High Court that because the subject-matter
of the writ petitions was purely contractual in nature, the
writ petitions were not maintainable. The High Court overruled
the objections of the administration with respect to the
maintainability of the writ petitions. The Hon'ble Supreme
Court at paragraph 11 of the above referred judgment observed
that "in the circumstances of this case, our inquiry is limited to the
question whether the contract was so constructed that loss was
inherent and implicit in it; if so, it ought to be modified. Otherwise,
the Court has no jurisdiction to alter the terms or rewrite the
contract between the parties". The learned Senior Advocate also
relies upon an another judgment of the Supreme Court, arising
out of an order of this Court in the case of Orissa State
Financial Corporation -vrs.- Narsingh Ch. Nayak and
Others: (2003) 10 SCC 261. The Orissa High Court passed the
order impugned in the case of Narsingh Ch. Nayak (supra)
directing that the petitioner shall file a fresh application before
the Corporation to advance loan to purchase a new truck and
on this being done the Corporation shall sanction the loan
within two months after the petitioner complies with the
necessary formalities. In the case of Narsingh Ch. Nayak
(supra) the Hon'ble Supreme Court observed that "it is manifest
that the High Court while considering the writ petition filed by the
owner of the vehicle for quashing of the notice of auction-sale and
for other consequential reliefs has passed order drawing up a fresh
contract between the parties and has issued certain further
directions in the matter; directing the Corporation to advance a fresh
loan to the writ petition to enable him to purchase a new truck; to
enter into agreement for realization of the balance loan amount in
accordance with law; to write off the remaining amount of
4
Rs.16,500/- and to order waiving of the interest till date etc." The
Hon'ble Supreme Court also observed that "the order, to
say the least, was beyond the scope of the writ petition which was
being considered by the High Court and beyond the jurisdiction of
the court in a contractual matter". Both the cases of the Hon'ble
Supreme Court are distinguishable from the present case.
In this case, the petitioners and the opposite party
no.1 entered into a contract. Similar contracts were also
executed in favour of several other players. Provision for new
agreement beyond five years is there in the agreement. It is
borne out from the records that the petitioners and two others
franchise holders have underperformed, the franchise of the
petitioners is being singled out, a decision has already been
taken by the CESU Management Board to allot the area to
other players i.e. FEDCO and ENZEN. The petitioners have
invested a lot of money, employed so many persons to carry out
the franchise and if the period of agreement of the petitioners-
company is not extended, it will create a lot of problems.
Though the learned Senior Advocate argues in the Court that
they will not allot the area allotted to the petitioners-company
to any other company, the document he filed in Court today
which is a copy of the Minutes of the CESU Management Board
indicate to the contrary. Such document was produced by him
and stated that it is a confidential document. But on my
request, the said document was given to me. I have carefully
gone through the document wherefrom it is seen that the CESU
Management Board has taken a decision to terminate the
franchise of the present petitioners and to allow the other
underperformed franchise holders. It is also borne out of the
same document that the CESU does not have enough
5
manpower to carry out the work of the petitioners, and a
fresh franchise through tender will take a long time. Hence,
it was decided to tag those areas to opposite party nos.3 and 4.
The said document is kept in sealed cover and formed a part of
the record.
Therefore, I find prima facie case for issuance of
notice and also grant of stay. In case the stay is not granted,
there would be disruption of electricity supply to the areas in
question and the balance of convenience lies in favour of the
petitioners because of the interest of the public at large.
Moreover, if the period of agreement of the franchise of the
petitioners is not extended, large number of people will be
rendered unemployed and the petitioners-company will face
huge loss.
In that view of the matter, issue notice to the opposite
parties. Learned counsel for the Caveator takes notice on behalf
of the opposite party no.1. He also received copy of the writ
petition. An extra set of the brief be served on the learned
Additional Government Advocate, who accepts notice on behalf
of the opposite party no.2.
Issue notices in the writ petition as well as in the I.A.
to the opposite party nos.3 to 8 through Speed Post
returnable within two weeks. Postal requisites shall be filed
within three working days hence. Accept one set of process
fee.
List this matter on 18.07.2018.
In the interim, it is directed that the opposite party
no.1 shall maintain status quo with respect to the
Distribution Franchise Agreement so far as the franchise of
6
the petitioners is concerned, till the next date. It is further
directed that the opposite party no.1 is restrained from
invoking the Bank Gurantees pursuant to the letter under
Annexure-16 series, but the petitioners shall keep the Bank
Gurantees alive till disposal of the writ petition.
Urgent certified copy of this order be granted on
proper application.
...........................
S. K. Mishra, J.
BJ