M/S Prabhudas And Sons, Thr. Its Partner ... vs State Of Mah. Food Civil Supply And C.P. ... on 21 June, 2022

[Cites 5, Cited by 0]

Bombay High Court

M/S Prabhudas And Sons, Thr. Its Partner ... vs State Of Mah. Food Civil Supply And C.P. ... on 21 June, 2022

2. The petitioner is the registered partnership firm engaged and carrying on business of holding of dealership of kerosene. The petitioner was appointed as a dealer by the respondent No.3 for the area of operation initially for undivided Akola district. The petitioner is holding said dealership since 1963 having blemishless record. In the year 1998 the Akola District was divided as Akola and Washim. On 5.7.2001 the respondent No.3 had issued communication to the respondent No.2 informing that allocation of dealership of Washim district be given to the petitioner. Said communication letter is at Annexure-II. On 17.5.2002 after completion of due procedure fresh licence for Washim district was issued in favour of the petitioner by the respondent No.2 ::: Uploaded on - 23/06/2022 ::: Downloaded on - 23/06/2022 23:33:08 ::: J-wp5352.09.odt 3/21 for selling the kerosene product. Said communication is at Annexure-III. By letter dated 18.2.2005 petitioner was informed that as per his request General Manager, MSO has approved for revision of area of operation of SKO Agency for existing Akola district to both the districts of Akola and Washim. The petitioner was asked to get the necessary amendment in the area of operation of M/s. Prabhudas and Sons. Accordingly, dealership agreement was executed which is at Annexure-IV. On 29.5.2008 suddenly petitioner has received communication from respondent No.3 by which area of operation of petitioner as SKO dealer was curtailed/reduced without giving opportunity of being heard. Therefore, on 5.9.2008 petitioner made representation to the respondent about original area of operation of the petitioner of undivided Akola district. It is the contention of the petitioner that by communication dated 19.6.2008 respondent No.1-State of Maharashtra, through Food, Civil Supply and C.P. Department by its letter of Principal Secretary, Mantralaya, Mumbai informed that the petitioner is not multiple dealer and ::: Uploaded on - 23/06/2022 ::: Downloaded on - 23/06/2022 23:33:08 ::: J-wp5352.09.odt 4/21 guidelines issued by Government are not applicable to the petitioner. Despite the communication by respondent No.1 the allocation of kerosene not continued to the petitioner. Hence, by way of this petition the petitioner is seeking direction against the respondent No.3 for regulating and releasing the quota of kerosene for the distribution purposes in favour of petitioner. The petitioner is further seeking direction against the respondent No.1 to issue necessary direction for withdrawal of the communication dated 29.5.2008.

3. In response to the notice the respondent No.3 filed reply and taken stand that the petitioner has filed a suit bearing Special Civil Suit No.310/2008 which was pending before the learned Civil Judge, Senior Division, Akola, subsequently it was withdrawn. Alternate efficacious remedy is available to the petitioner, hence, he cannot avail two remedies simultaneously for the same relief. All disputes between the petitioner and the respondent No.3 are required to be resolved by way of arbitration. In view of clause 28 of the dealership agreement, petition should not be entertained. ::: Uploaded on - 23/06/2022 ::: Downloaded on - 23/06/2022 23:33:08 ::: J-wp5352.09.odt 5/21 It is further contention of the respondent that a perusal of the communication dated 29.5.2008 would demonstrate that the area of operation of the petitioner has been revised invoking clause 1(c) of the dealership agreement dated 28.1.1997. It would also be pertinent to mention that similar petition was also filed by another kerosene dealer which was disposed of by holding that the dispute between the parties could be resolved by means of arbitration in view of arbitration clause in the dealership agreement and prayed for dismissal of the petition.

4. Heard Shri C.S. Kaptan, Senior Counsel with Shri P.S. Chawhan, Counsel for the petitioner, Shri D.P. Thakare, Additional Government Pleader for the respondent No.1 and Shri Rohit Joshi, Advocate for the respondent No.3.

5. It is submitted by the learned senior counsel Shri Kaptan that the petitioner is having dealership since 1963 and he is having blemishless record to carry on the dealership. The relationship of petitioner as a dealer is governed as per the agreement executed between the parties. For the ::: Uploaded on - 23/06/2022 ::: Downloaded on - 23/06/2022 23:33:08 ::: J-wp5352.09.odt 6/21 administrative purpose, the Akola district has been bifurcated into Akola and Washim district. The petitioner was operating his dealership within the area of Washim as well as Akola district. The respondent Nos.1 and 3 had issued a communication to the respondent No.2 for the purpose of release of SKO in Washim district in favour of the petitioner. Accordingly, fresh licence for Washim district was issued in favour of the petitioner by the respondent No.2 to deal with and selling the kerosene product at various places to the district. A letter, Annexcure-II, issued in favour of the petitioner by the respondent No.3, shows that the petitioner was authorized as a SKO LDO Agent at Akola. It is also mentioned that the petitioner is distributing SKO in the undivided Akola district since 1963. The area of operation of this dealer as per the dealership agreement in Akola district, now Akola district has been bifurcated into Akola and Washim district since 1998. Since the original area of the operation of this dealer included the area of Washim district also an allocation may be given to him from Washim district also. On ::: Uploaded on - 23/06/2022 ::: Downloaded on - 23/06/2022 23:33:08 ::: J-wp5352.09.odt 7/21 17.5.2002 after completion of due procedure fresh licence for Washim district was issued in favour of petitioner by respondent No.2 for selling the kerosene product. The said licence is at Annexure-III. Vide communication dated 18.2.2005 petitioner was informed by the respondent No.3 that as per the request of petitioner approval for revision of area of operation was sanctioned to him to both the districts i.e. Akola and Washim and he was requested to get the necessary amendment done in the operation of area in a dealership agreement at the earliest.

6. He further invited our attention towards the communication dated 29.5.2008, by which it was intimated that in view of direction received from the Principal Secretary to the Government, Food, Civil Supplies and C.P. Department, the additional area i.e. Washim district given to him under the agreement dated 28.1.1997 and letter dated 18.2.2005 extending the area of operation is withdrawn with immediate effect. He submitted that though it is intimated by the Government vide communication dated 19 th June, 2008 that ::: Uploaded on - 23/06/2022 ::: Downloaded on - 23/06/2022 23:33:08 ::: J-wp5352.09.odt 8/21 both the dealers who are working on extension point are not multiple dealers and, therefore, the directions issued dated 10.1.2008 are not applicable to M/s. Parmanand & Holaram S. Chawla and M/s. Prabhudas and Sons i.e. the petitioner. Despite the said communication illegally and unauthorizedly the area of operation allotted to the petitioner was withdrawn. He has forwarded the representation to the Principal Secretary, Food, Civil Supplies and C.P. Department, Mantralaya, Mumbai which was not considered and without giving him opportunity of hearing the area of operation was withdrawn by the respondent No.3.

7. The petitioner approached to the respondent No.1 and made representation about the original area of operation of the petitioner of undivided Akola district. The respondent No.1 had observed and explained the position that the directives given as per the letter dated 10 th January, 2008 is not at all applicable to the present petitioner and, therefore, present petitioner is entitled for the allocation of kerosene for the revised area operation of Akola and Washim district. ::: Uploaded on - 23/06/2022 ::: Downloaded on - 23/06/2022 23:33:08 ::: J-wp5352.09.odt 9/21 Though these directions are issued by the respondent No.1 in the light of communication issued by the Under Secretary of the respondent No.1, despite all hurdles and controversy, the respondent No.3 has not continued the allocation of kerosene to the petitioner. Hence, this petition.

8. On the other hand, learned counsel Shri Rohit Joshi for the respondent No.3 submitted that initially the petitioner has filed Special Civil Suit No.310/2008 which was subsequently withdrawn. The petitioner cannot avail two remedies simultaneously and, therefore, the petition deserves to be dismissed. He further submitted that all disputes between the petitioner and respondent No.3 are required to be resolved by way of arbitration. In view of clause (28) of the dealership agreement dated 28.1.1997 contained in dealership agreement, the petition should not be entertained. He further submitted that as per the dealership agreement respondent No.3 has absolute discretion to increase, reduce or to modify the area of operation of the petitioner and hence the petition deserves to be dismissed.

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9. It is not disputed that the petitioner was having dealership. The communication which is on record shows that the petitioner was appointed as dealer by the respondent No.3 for the area of operation initially for undivided Akola district. It is also not in dispute that the relationship of the petitioner as a dealer with the respondent No.3 is governed by the agreement executed between them. In the year 1998, the Akola district has been bifurcated into Akola and Washim district. The respondent No.3 has continued the operation of area of petitioner to deal and transact with kerosene and issued the communication accordingly. Fresh licence of Washim district was also issued in favour of petitioner by the respondent No.2 to deal with selling the kerosene product at various places to the district dated 17.5.2002. It is also not in dispute that on 18.2.2005 by communication letter issued by the respondent No.3 to the petitioner and informed that in the light of request letter respondent No.3 has considered and confirmed the operation of dealership of petitioner and clarified that said communication will form a part of ::: Uploaded on - 23/06/2022 ::: Downloaded on - 23/06/2022 23:33:08 ::: J-wp5352.09.odt 11/21 dealership agreement as far as area of operation is concerned. Said communication is on record. The record further shows that suddenly on 29.5.2008 it was informed to the petitioner that in view of direction issued by the Principal Secretary to the Government, Food, Civil Supplies and C.P. Department, Government of Maharashtra that in some districts the same wholesale dealer distributes PDS kerosene in more than one district i.e. besides one district, the same wholesale dealer distributes PDS kerosene as a multiple point dealer on an extension point in another district and, therefore, the area of operation of the petitioner was withdrawn with immediate effect. It is also a part of record that the Under Secretary, Food, Civil Supplies by letter dated 19 th June, 2008 informed the respondent No.2 and respondent No.3 that the guidelines issued by Government regarding multiple dealership are not applicable to the petitioner as well as another dealer M/s. P. and H.S. Chawla.

10. In the light of abovesaid documentary evidence it has to be seen whether the action of respondent No.3 is ::: Uploaded on - 23/06/2022 ::: Downloaded on - 23/06/2022 23:33:08 ::: J-wp5352.09.odt 12/21 justified in not continuing the allocation of kerosene in favour of petitioner. Entire issue revolves around the agreement. It is submitted by the learned counsel for the respondent No.3 that the respondent No.3 has discretion to increase, reduce or to modify the area of operation of the petitioner. Admittedly, the said agreement is executed between the petitioner and the respondent No.3. The recitals of the agreement shows that clause (c) deals with the condition that the dealer will during the continuance of this agreement confined himself to selling in the area or territory specific in sub-clause (a) above and such other points as may from time to time be authorized by the Corporation in writing provided always that the Corporation may from time to time and at any time at its absolute discretion increase, reduce, restrict or otherwise alter the said area or territory and at any time at its absolute discretion increase, reduce, restrict or otherwise alter the said area or territory and nothing herein contained will be deemed to restrict the right of Corporation to appoint other dealer for the whole or part of said area or territory. The Corporation ::: Uploaded on - 23/06/2022 ::: Downloaded on - 23/06/2022 23:33:08 ::: J-wp5352.09.odt 13/21 will be entitled to make direct or indirect sell to any person whomsoever and for appointing other dealer for the purpose of direct or indirect sell in which event the dealer could not be entitled to any claim for commission or allowance for any such direct or indirect sells not made through the dealer. Admittedly, by this condition respondent No.3 has discretion to increase, reduce, restrict or alter the area of operation. At the same time the condition No.21 of the said agreement shows that the agreement may be terminated without assigning any reason whatsoever by either party upon giving to the other not less than 30 days notice in writing to expire at any time of the intention to terminate it and upon the expiration of any such notice the agreement shall stand automatically cancelled and revoked, but without prejudice to the rights of the either party against the other in respect of any matter or thing antecedent to such termination. The grievance made by the petitioner is that despite there is a communication by the Under Secretary that the directions issued by the Food, Civil Supplies and C.P. Department, ::: Uploaded on - 23/06/2022 ::: Downloaded on - 23/06/2022 23:33:08 ::: J-wp5352.09.odt 14/21 Mantralaya, Mumbai are not applicable to the present petitioner and one more dealer then also without giving any notice to the present petitioner his area of operation was withdrawn and his dealership in respect of Washim district is terminated. It is submitted by the learned counsel for the petitioner that the action on the part of the respondent No.3 without giving him opportunity of hearing terminated the dealership is unjust, arbitrary and against the natural justice and, therefore, direction is to be issued to the respondent No.3.

11. In support of his contention he relied upon Sir Shadilal Distillery & Chemicals Works vs. State of U.P. and others, reported in (1997)1 SCC 527, wherein Hon'ble Apex Court held that the Government must issue notice before cancellation of allotment made to the third respondent, as well as appellant, consider their objection and pass appropriate order in that behalf for grant on refusal of licence in accordance with rules. The facts of the cited case are identical with the present case. In the cited case also prior to ::: Uploaded on - 23/06/2022 ::: Downloaded on - 23/06/2022 23:33:08 ::: J-wp5352.09.odt 15/21 bifurcation of district Saharanpur and Hardwar, Hardwar was a part of Saharanpur and respondent was granted licence for Saharanpur and Hardwar and allotment was cancelled without giving notice. He further relied upon the Hindustan Petroleum Corporation Limited and others vs. Super Highway Services and another, reported in (2010) 3 SCC 321, wherein the Hon'ble Apex Court has held that cancellation of dealership agreement is a serious business and cannot be taken lightly. In relevant para No.31 it is observed that, cancellation of dealership agreement of a party is a serious business and cannot be taken lightly. In order to justify the action taken to terminate such an agreement, the authority concerned has to act fairly and in complete adherence to the rules/guidelines framed for the said purpose. The non-service of notice to the aggrieved person before the termination of his dealership agreement also offends the well-established principle that no person should be condemned unheard. ::: Uploaded on - 23/06/2022 ::: Downloaded on - 23/06/2022 23:33:08 ::: J-wp5352.09.odt 16/21

12. Thus, the grievance of the petitioner was that the action on the part of respondent No.3 is not fair and complete adherence to the rules/guidelines framed and therefore, liable to be set aside.

13. On the other hand, learned counsel for the respondent submitted that due to arbitration clause in the agreement writ petition is not maintainable. In support of his contention he relied upon Genpact India Private Limited vs. Deputy Commissioner of Income Tax and another, reported in 2019 SCC OnLine SC 1500, wherein Hon'ble Apex Court held that, it is well settled that in order that a mandamus be issued to compel the authority to do something, it must be shown that there is a statute which imposes a legal duty and the aggrieved party has a legal right under the statute to enforce its performance. The present is a case of pure and simple business contract. He further relied upon Oil and Natural Gas Corporation Ltd., Mumbai vs. M/s. Streamline Shipping Co. Pvt. Ltd., reported in 2002(3) Mh.L.J. 530, wherein the ::: Uploaded on - 23/06/2022 ::: Downloaded on - 23/06/2022 23:33:08 ::: J-wp5352.09.odt 17/21 question before the Hon'ble Apex Court was whether the Government can unilaterally received a contract if the terms thereof so provided. It is held by the Hon'ble Apex Court that under Section 14(e) of the Specific Relief Act no injunction can be granted to prevent breach of contract. Both the cited case law on which learned counsel Shri Rohit Joshi relied upon are not helpful as facts of the cited case are not identical with the present case.

14. Regarding the maintainability of the writ petition learned counsel for the petitioner rightly relied upon Harbanslal Sahnia and another vs. Indian Oil Corpn. Ltd. And others, reported in AIR 2003 SC 2120, wherein the issue involved was alternative remedy is available whether rule of exclusion of writ jurisdiction by availability of alternative remedy goes. It is held by Hon'ble Apex Court that in an appropriate case, in spite of availability of alternative remedy, the High Court may still exercise its jurisdiction in at least three contingencies: (i) where the writ petition seeks enforcement of any of the Fundamental Rights; (ii) where ::: Uploaded on - 23/06/2022 ::: Downloaded on - 23/06/2022 23:33:08 ::: J-wp5352.09.odt 18/21 there is failure of principles of natural justice; (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act and is challenged. It is further held by the Hon'ble Apex Court that the petitioners' dealership, which is their bread and butter came to be terminated for an irrelevant and non-existent cause, in such circumstances appellants should have been allowed relief by way of writ petition instead of driving them to the need of initiating arbitration proceedings. Thus, in the light of the judgment of the Hon'ble Apex Court writ petition is maintainable in the present case.

15. The prayer of the petitioner in the present petition is to issue any appropriate writ, order or direction to the respondent No.1 to issue necessary direction against the respondent No.3 for regulating and releasing the quota of kerosene for the distribution purposes in favour of the petitioner. Present petition is filed in the year 2009. None of the parties have put forward today's position regarding the dealership allotted in the Washim district. The dealership may have been allotted to any person, therefore, the prayer of the ::: Uploaded on - 23/06/2022 ::: Downloaded on - 23/06/2022 23:33:08 ::: J-wp5352.09.odt 19/21 petitioner regarding the direction against the respondent No.3 for regulating and releasing the quota of kerosene cannot be granted. But, in the light of the circumstances that despite the communication by the Government that the directions issued by the Government dated 19th June, 2008 that the present petitioner is not a multiple dealer and, therefore, the direction dated 10th January, 2008 are not applicable to him, thereafter also respondent No.3 has withdrawn the operation area of the petitioner vide communication letter dated 29.5.2008 without giving him an opportunity of hearing. Admittedly, said action on the part of the respondent No.3 is arbitrary, unjust and against the natural justice. The dealership of the petitioner for Washim district is terminated on irrelevant and non-existent ground without giving an opportunity of hearing. The petitioner is earning his livelihood through the said dealership which is terminated, said action is against the natural justice. Natural justice simply means to make a sensible and reasonable decision by adopting procedure on particular issue. Here in the present case the action of the respondent No.3 is ::: Uploaded on - 23/06/2022 ::: Downloaded on - 23/06/2022 23:33:08 ::: J-wp5352.09.odt 20/21 also unjust and arbitrary in view of clause 21 of the said agreement. Clause 21 of the said agreement specifically states that before terminating the dealership either of the party has to give 30 day's notice in writing expressing the intention to terminate the said dealership. No notice is given to the petitioner before terminating the dealership. Thus, the respondent No.3 has contravened the clause 21 of the said agreement. Therefore, action on the part of respondent No.3 is unjust. Considering that several years have been lapsed after the action of the respondent No.3. Today's position whether the dealership was allotted to anybody or not is not before us. In such circumstances it will be just and proper to give direction to the respondent No.3 to provide an opportunity to the petitioner of hearing and shall take appropriate decision regarding the allotment of area, in the light of agreement. Hence, we are of the view that writ petition deserves to be allowed partly. Hence, we proceed to pass following order :

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ORDER

(i) Writ petition is hereby allowed partly.

(ii) The Indian Oil Corporation's order dated 29.5.2008 terminating the dealership of the petitioner is hereby quashed and set aside.

(iii) The respondent No.3 is directed to consider the representation of the petitioner by giving him an opportunity of hearing and shall take appropriate decision regarding the allotment of area. Decision on the representation be taken within a period of six weeks from receipt of copy of this judgment.

16. Rule is made absolute in the aforesaid terms with no order as to costs.

(Urmila Joshi-Phalke, J.) (A.S.Chandurkar, J.) okMksns ::: Uploaded on - 23/06/2022 ::: Downloaded on - 23/06/2022 23:33:08 :::

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