Calcutta High Court (Appellete Side)
Wp 13269 (W) Of 2019 vs Indian Oil Corporation Ltd & Ors on 16 April, 2025
1
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
Appellate Side
Present: - Hon'ble Mr. Justice Subhendu Samanta.
IN THE MATTER OF
WP 13269 (W) of 2019
M/s Roy & Company & Ors.
Vs.
Indian Oil Corporation Ltd & Ors.
For the Petitioners : Mr. Ram Anand Agarwala, Adv.,
Ms. Nibedita Pal Adv.
For the IOCL : Mr. Manwendra Singh, Adv.,
Ms. Saswati Chatterjee Adv.
Reserved on : 05.03.2025
Judgment on : 16.04.2025
Subhendu Samanta, J.
1. One Smt. Siya Ray was carrying on business under dealership agreement with M/s. Indian Oil Corporation Limited (IOCL) as proprietress of the said dealership and had obtained necessary permissions including the Kerosene agents licence under West Bengal Kerosene Control Order, 1968. Due to old age, Siya Ray inducted her son Binay Ray, (petitioner No. 2) as a partner in the said business.
The partnership of Siya Ray and petitioner No. 2 was duly approved by the IOCL. Thereafter petitioner No. 3 (wife of petitioner No. 2) further incorporated in the said partnership business which was duly approved by the IOCL again and thereby re-constitution of the partnership farm was made and a dealership was accepted with IOCL on 29.07.2009. Since then all three partners are performing the business.
22. On 30th September 2009 Siya Ray expired. Surviving partners (petitioner No. 2 and 3) submitted proposal to IOCL for re-constitution of the farm amongst themselves as partners and also submitted no objection of all other legal heirs of Late Siya Ray, except one married daughter of Siya Ray namely Sushila Ray, who refuse to give her no objection.
3. The proposal of the petitioners was turned down; accordingly, they approached this court vide writ petition No. WPA 1240 of 2010. A Co-ordinate Bench of this Court vide its judgment dated 1st September 2011, allowed the writ petition directing IOCL to allow re-constitution of partnership farm of the petitioners and give liberty to Sushila Ray to approach Civil Court to get her rights declared and title perfected.
4. IOCL proceeded to the Hon'ble Division Bench in an appeal being APO No. 43 of 2013. The Hon'ble Division Bench vide order dated 7th December 2017 disposed of the appeal by allowing the respondents therein (petitioners herein) to continue the dealership on temporary basis and IOCL was directed to take a reasoned decision whether they will renew the dealership of petitioner on permanent basis or not. In terms of the direction of Hon'ble Division Bench, the concerned authority has passed a reasoned decision (impugned) which was communicated through a letter dated 9th September 2019.
5. Hence this Writ.
6. Mr. Ramananda Agarwal, Learned Senior Counsel appearing on behalf of the petitioner submits that impugned order is illegal and arbitrary. He further submits that the Hon'ble Division Bench has 3 made a specific direction to re-constitute the firm but the said direction was not followed.
7. It is the further contention of the petitioners that the petitioners are faithfully and diligently performed and carried out directions, instructions, guidelines and orders given by the corporation from time to time. Thus the impugned order has no effects in terms of allegation for violation of Clause 42. It is the further contention of Mr. Agarwal that the Hon'ble Division Bench has properly interpreted the terms of Clause 46 of the agreement, the respondent authority is debarred to take different stand at the time of passing the reasoned order.
8. Mr. Agarwal further argued that the Hon'ble Division Bench has specifically observed that IOCL being a statutory authority should not be interfered with themselves in the private disputes but the conduct of the IOCL proved that they have influenced by the half sister Petitioner No. 2 whose right was finally determined by the Hon'ble Single Bench of this Court.
9. Mr. Agarwal further argued the impugned order is unreasonable and violative to the specific direction of the Hon'ble Division Bench of this Court and thus the said order is liable to be set aside.
10. In support of his contention Mr. Agarwal has submitted the decisions of Hon'ble Supreme Court as follows:-
i) Indian IOCL Vs. Nilofer Siddqui and Ors (2015) 16 SCC 125
ii) Harabanshlal Ashnia and Anr. Vs. IOCL and Ors (2003) 2 SCC 107 4
iii) Union of India and Ors Vs. Tantia Construction Private Ltd.
(2011) 5 SCC 697
iv) Magadh Sugar and Energy Limited Vs. State of Bihar and Ors (2022) 16 SCC 428
11. Mr. Manawendra Singh Learned Counsel appearing on behalf of the IOCL submits that the impugned order passed by the competent authority properly discussed the reasons for rejection of the prayer of the petitioners for re-constitution of the partnership farms. The application of the petitioners are violative in Clause 42 and 46 of agreement. The petitioners are to strictly follow the re-constitution policy of the IOCL as mentioned in Clause 1.5 of the Re-constitution policy. The petitioners have failed to provide no objection from all the legal heirs of deceased partner Siya Ray, hence, their prayer was correctly turned down. Mr. Singh further argued that policy guideline for re-constitution of retail outlet dealership made provisions that in the event of death of a partner in case of partnership business, re-
constitution may be allowed with the legal heirs of deceased partner and surviving partners; however, if there is no legal heir or legal heirs have expressed unwillingness, then the dealership/distributorship shall be re-constituted with surviving partners. He submits that in the present case the petitioners could not place the no objection of one of the daughters of Smt. Siya Ray namely Sushila Ray. Thus the re-
constitution policy of the concerned authority debarred the petitioner.
Sushila Ray had expressed her unwillingness. Thus the competent authority has correctly passed the impugned order.
512. Mr. Singh, further argued that there is specific arbitration Clause in the agreement between the partners and IOCL. If the petitioners are aggrieved, they may approach to the arbitrator for settle out the dispute. When there is an efficacious remedy available to the parties before an alternative forum, this writ court shall not entertain the petitioner.
13. Mr. Singh further argued that dealership agreement is a commercial contract to run the business between IOCL and the petitioners. In case of Commercial Contract, the Hon'ble Supreme Court has categorically observed that the contract of such a nature has to be dealt with strictly and no fairness can be judged in interpreting such contract.
14. In support of his contentions, Mr. Singh, has placed reliance upon the decision of Hon'ble Supreme Court as follows:-
i) Vishal Tewari Vs. Union of India (2024) 4 SCC 115
ii) Mary Vs. State of Kerala (2014) 14 SCC 272
iii) West Bengal State Electricity Board Vs. Patel Engineering Company Limited and Ors. (2021) 2 SCC 451
iv) Assistant Excise Commissioner and Ors. Vs. Issac Peter and Ors. (1994) 4 SCC 104
v) Sanjana M. WIG (Ms) Vs. Hindustan Petroleum Corp. Ltd. (2005) 8 SCC 242 6
vi) Ramana Dayaram Shetty Vs. International Airport Authority of India and Ors. (1979) 3 SCC 489
vii) Indian Oil Corporation Ltd. and Ors. Vs. Abhijit Kar Modak (FMA 1716 of 2018), (judgment pronounced by Division Bench of this Court on 18.04.2024)
15. In Vishal Tewari (supra) Hon'ble Supreme Court dealt with power of the Court under judicial review for SEBIs regulatory domain, and has held for
15. In a consistent line of precedent, this Court has held that when technical questions arise particularly in the financial or economic realm; experts with domain knowledge in the field have expressed their views; and such views are duty considered by the expert regulator in designing policies and implementing them in the exercise of its power to frame subordinate legislation, the court ought not to substitute its own view by supplanting the role of the expert. Courts do not act as appellate authorities over policies framed by the statutory regulator and may interfere only when it is found that the actions are arbitrary or violative of constitutional or statutory mandates. The court cannot examine the correctness, suitability, or appropriateness of the policy, particularly when it is framed by a specialised regulatory agency in collaboration with experts. The court cannot interfere merely because in its opinion a better alternative is available.
17. From the above exposition of law, the following principles emerge:
(a) Courts do not and cannot act as appellate authorities examining the correctness, suitability, and appropriateness of a policy, nor are 7 courts advisors to expert regulatory agencies on matters of policy which they are entitled to formulate;
(b) The scope of judicial review, when examining a policy framed by a specialised regulator, is to scrutinise whether it: (i) violates the fundamental rights of the citizens;
(ii) is contrary to the provisions of the Constitution; (iii) is opposed to a statutory provision; or (iv) is manifestly arbitrary. The legality of the policy, and not the wisdom or soundness of the policy, is the subject of judicial review;
(c) When technical questions arise particularly in the domain of economic or financial matters and experts in the field have expressed their views and such views are duly considered by the statutory regulator, the resultant policies or subordinate legislative framework ought not to be Interfered with;
(d) SEBI's wide powers, coupled with its expertise and robust information-
gathering mechanism, lend a high level of credibility to its decisions as a regulatory, adjudicatory and prosecuting agency; and (e) This Court must be mindful of the public interest that guides the functioning of SEBI and refrains from substituting its own wisdom in place of the actions of SEBI.
(e) This Court must be mindful of the public interest that guides the functioning of SEBI and refrains from subsisting its own wisdom in place of the actions of SEBI.
We have made a conscious effort to keep the above principles in mind while adjudicating the petitions, 8 which contain several prayers that require the Court to enter SEBI's domain.
16. In Mary (supra) the Hon'ble Supreme Court had dealt with doctrine of fairness and reasonableness in a statutory contract; and has held that
24. We have given our most anxious consideration to the submission advanced and we do not find any substance in the submission of the learned counsel for the appellant and the decision relied on by her, in fact, carves out an exception in case of a commercial transaction. The duty to act fairly is g sought to be imported into the statutory contract to avoid forfeiture of the bid amount. The doctrine of fairness is nothing but a duty to act fairly and reasonably. It is a doctrine developed in the administrative law field to ensure the rule of law and to prevent failure of justice where an action is administrative in nature. Where the function is quasi-judicial, the doctrine of fairness is evolved to ensure fair action. But, in our opinion, it certainly cannot be invoked to amend, alter, or vary an express term of the contract between the parties. This is so even if the contract is governed by a statutory provision i.e. where it is a statutory contract.
25. It is one thing to say that a statutory contract or for that matter, every contract must be construed reasonably, having regard to its language. But to strike down the terms of a statutory contract on the ground of unfairness is entirely different. Viewed from this angle, we are of the opinion that Rule 5(15) of the Rules cannot be struck down on the ground urged by the appellant and a statutory contract cannot be varied, added or altered by importing 9 the doctrine of fairness. In a contract of the present nature, the licensee takes a calculated risk.
Maybe the appellant was not wise enough but in law, she can not be relieved of the obligations undertaken by her under the contract. Issac Peters supports this view and says so eloquently in the following words: (SCC p. 124, para
26) C "26. In short, the duty to act fairly is sought to be imported into the contract to modify and alter its terms and to create an obligation upon the State which is not there in the contract. We must confess, we are not aware of any such doctrine of fairness or reasonableness. Nor could the learned counsel bring to our notice any decision laying down such a proposition.
Doctrine of fairness or the duty to act fairly and reasonably is a doctrine developed in the administrative law field to ensure the rule of law and to prevent failure of justice where the action is administrative in nature. Just as principles of natural justice ensure fair decision where the function is quasi-judicial, the doctrine of fairness is evolved to ensure fair action where the function is administrative. But it can certainly not be invoked to amend, alter or vary the express terms of the contract between the parties. This is so, even if the contract is governed by statutory provisions i.e. where it is a statutory contract or rather more so. It is one thing to say that a contract every contract-
10must be construed reasonably having regard to its language."
17. In State West Bengal Electricity Board (supra) Hon'ble Supreme Court has held that the statutory authority shall not allow inclusion mistake in tender document to be corrected
24. The controversy in this case has arisen at the threshold. It cannot be disputed that this is an international competitive bidding which postulates keen competition and high efficiency. The bidders have or should have assistance of technical experts. The degree of care required in such a bidding is greater than in ordinary local bids for small works. It is essential to maintain the sanctity and integrity of process of tender/bid and also award of a contract. The appellant, Respondents 1 to 4 and Respondents 10 and 11 are all bound by the ITB which should be complied with scrupulously.
In a work of this nature and magnitude where bidders who fulfil prequalification alone are invited to bid, adherence to the instructions cannot be given a go-by by branding it as a pedantic approach, otherwise it will encourage and provide scope for discrimination, arbitrariness and favouritism which are totally opposed to the rule of law and our constitutional values. The very purpose of issuing rules/instructions is to ensure their enforcement Test the rule of law should be a casualty.
Relaxation or waiver of a rule or condition, unless so provided under the ITB, by the 11 State or its agencies (the appellant) in favour of one bidder would create justifiable doubts in the minds of other bidders, would impair the rule of transparency and fairness and provide room for manipulation to suit the whims of the State agencies in picking and choosing a bidder for awarding contracts as in the case of distributing bounty or charity. In our view such approach should always be avoided. Where power to relax or waive a rule or a condition exists under the rules, it has to be done strictly in compliance with the rules. We have, therefore, no hesitation in concluding that adherence to the ITB or rules is the best principle to be followed, which is also in the best public interest.
18. In Issac Peter the Hon'ble Supreme Court has also dealt with doctrine and fairness and reasonableness in tender document as follows:-
26. Learned counsel for respondents then submitted that doctrine of fairness and reasonableness must be read into contracts to which State is a party. It is submitted that the State cannot act unreasonably or unfairly even while acting under a contract involving State power. Now, let us see, what is the purpose for which this argument is addressed and what is the implication? The purpose, as we can see, is that though the contract says that supply of additional quota is discretionary, it must be read as obligatory at least to the extent of previous year's supplies by applying the said doctrine. It is submitted that if this is not done, the licensees would 12 suffer monetarily. The other purpose is to say that if the State is not able to so supply, it would be unreasonable on its part to demand the full amount due to it under the contract. In short, the duty to act fairly is sought to be imported into the contract to modify and alter its terms and to create an obligation upon the State which is not there in the contract. We must confess, we are not aware of any such doctrine of fairness or reasonableness. Nor could the learned counsel bring to our notice any decision laying down such a proposition. Doctrine of fairness or the duty to act fairly and reasonably is a doctrine developed in the administrative law field to ensure the rule of law and to prevent failure of justice where the action is administrative in nature. Just as principles of natural justice ensure fair decision where the function is quasi-judicial, the doctrine of fairness is d evolved to ensure fair action where the function is administrative. But it can certainly not be invoked to amend, alter or vary the express terms of the contract between the parties. This is so, even if the contract is governed by statutory provisions, i.e., where it is a statutory contractor rather more so. It is one thing to say that a contract every contract must be construed reasonably having regard to its language. But this is not what the licensees e say. They seek to create an obligation on the other party to the contract, just because it happens to be the State. They are not prepared to apply the very same rule in converse case, i.e., where the State has abundant supplies and wants the licensees to lift all the stocks. The licensees will undertake no obligation to lift all those stocks even if the State suffers loss. This one-sided obligation, in modification of express terms of the contract, in the name of f duty to act fairly, is 13 what we are unable to appreciate.
The decisions cited by the learned counsel for the licensees do not support their proposition. In Dwarkadas Marfatia v. Board of Trustees of the Port of Bombay it was held that where a public authority is exempted from the operation of a statute like Rent Control Act, it must be presumed that such exemption from the statute is coupled with the duty to act fairly and reasonably. The decision does not 9 say that the terms and conditions of contract can be varied, added or altered by importing the said doctrine. It may be noted that though the said principle was affirmed, no relief was given to the appellant in that case.
Shrilekha Vidyarthi v. State of U.P. was a case of mass termination of District Government Counsel in the State of U.P. It was a case of termination from a post involving public element. It was a case of non-
government servant a holding a public office, on account of which it was held to be a matter within the public law field. This decision too does not affirm the principle now canvassed by the learned counsel.
We are, therefore, of the opinion that in case of contracts freely entered into with the State, like the present ones, there is no room for invoking the doctrine of fairness and reasonableness against one party to the contract (State), for the purpose of altering or adding b to the terms and conditions of the contract, merely because it happens to be the State. In such cases, the mutual rights and liabilities of the parties are governed by the terms of the contracts (which may be statutory in some cases) and the laws relating to contracts. It must be remembered that these contracts are entered into pursuant to public auction, floating of tenders or by negotiation. There is no compulsion on anyone to enter 14 into these contracts. It is voluntary on both sides. There can be no question of the State power being involved in such contracts. It bears repetition to say that the State does not guarantee profit to the licensees in such contracts. There is no warranty against incurring losses. It is a business for the licensees.
Whether they make profit or incur loss is no concern of the State. In law, it is entitled to its money under the contract. It is not as if the licensees are going to pay more d to the State in case they make substantial profits. We reiterate that what we have said hereinabove is in the context of contracts entered into between the State and its citizens pursuant to public auction, floating of tenders or by negotiation. It is not necessary to say more than this for the purpose of these cases. What would be the position in the case of contracts entered into otherwise than by public auction, floating of tenders or negotiation, we need not express any opinion herein.
19. The Hon'ble Division Bench in Abhijit Kar and ors (FMA 1716 of 2018) has held that 7.1 Coming to the second question, it is trite law that reconstitution of commercial dealership or distributorship under Clause 3.4 of the 2013 guidelines shall be personal and privy to the appellants/oil company and the writ petitioner/respondent no. 1 and it shall not amount to novation of the contract of the deceased father of the petitioner who was also a LPG distributor. Coming to the 3rd question, it is beneficial to reproduce Clause 3.4 of the 2013 guidelines which reads thus:
15"3.4 In cases of death of the sole dealer/distributor, reconstitution may be made in favour of the legal heir. However, if there is no legal heir(s) or legal heir(s) has expressed unwillingness, dealership/distributorship shall be terminated".
7.2 Cursory reading of the aforesaid Clause makes it clear that in case of death of a distributor/dealer, reconstitution may be made in favour of the legal heir(s). However, in case of non-
existence of any legal heir(s) and legal heir(s) has/have expressed unwillingness, the dealership/distributorship of the deceased shall be terminated. The aforesaid provision made it obligatory on the part of the oil company to consider the application of the respondent/writ petitioner in accordance with the guidelines of the company or any superceding guidelines by the Petroleum Ministry. Though we cannot read this provision as a provision for compassionate appointment/engagement as dealer/distributor, this provision vests discretion in the appellants/oil company to consider reconstitution of the dealership/distributorship of the deceased in favour of his legal heir(s) if he or they are willing.
20. In Magadh Sugar and Energy Limited (supra) The Hon'ble Apex Court following the several decisions of the Supreme Court has given to the conclusion that it is now well established that an alternative remedy is not an absolute bar to the writ jurisdiction of High Court or Supreme Court and formed without exhausting such alternative remedy of writ petition could not maintainable.
1621. The Hon'ble Supreme Court has discussed the issue as follows.
20. While a High Court would normally not exercise its writ jurisdiction under Article 226 of the Constitution if an effective and efficacious alternative remedy is available, the existence of an alternative remedy does not by itself bar the High Court from exercising its jurisdiction in certain contingencies. This principle has been crystallised by this Court in Whirlpool Corpn. v. Registrar of Trade Marks 22 and Harbanslal Sahnia v. Indian Oil Corpn. Ltd. 23 Recently. in Radha Krishan Industries v. State of H.P.21 a two-
Judge Bench of this Court of which one of us was a part of (D.Y. Chandrachud, J.) has summarised the principles governing the exercise of writ jurisdiction by the High Court in the presence of an alternative remedy. This Court has observed:
(Radha Krishan Industries case21, SCC p. 795, para 27)
27. The principles of law which emerge are that:
27.1. The power under Article 226 of the Constitution to issue writs can be exercised not only for the enforcement of fundamental rights, but for any other purpose as well.
27.2. The High Court has the discretion not to entertain a writ petition. One of the restrictions placed on the power of the High Court is where an effective alternative remedy is available to the aggrieved person.
27.3. Exceptions to the rule of alternative remedy arise where: (a) the writ petition has been filed for the enforcement of a fundamental 17 right protected by Part III of the Constitution;
(b) there has been a violation of the principles of natural justice; (c) the order or proceedings are wholly without jurisdiction; or (d) the vires of a legislation is challenged.
27.4. An alternative remedy by itself does not divest the High Court of its powers under Article 226 of the Constitution in an appropriate case though ordinarily, a writ petition should not be entertained when an efficacious alternative remedy is provided by law.
27.5. When a right is created by a statute, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution. This rule of exhaustion of statutory remedies is a rule of policy, convenience and discretion.
27.6. In cases where there are disputed questions of fact, the High Court may decide to decline jurisdiction in a writ petition.
However, if the High Court is objectively of the view that the nature of the controversy requires the exercise of its writ jurisdiction, such a view would not readily be interfered with."
21. The principle of alternate remedies and its exceptions was also reiterated recently in the decision in Commr. of State Tax v. Commercial Steel Lid.24 In State of H.P. v.
Gujarat Ambuja Cement Ltd. 25 this Court has held that a writ petition is maintainable before the High Court if the Taxing Authorities have acted beyond the scope of their 18 jurisdiction. This Court observed:
(Gujarat Ambuja Cement case 25, SCC pp. 517-18. para 23) "23. Where under a statute there is an allegation of infringement of fundamental rights or when on the undisputed facts the Taxing Authorities are shown to have assumed jurisdiction which they do not possess can be the grounds on which the writ petitions can be entertained. But normally the High Court should not entertain writ petitions unless it is shown that there is something more in a case, something going to the root of the jurisdiction of the officer, something which would show that it would be a case of palpable injustice to the writ petitioner to force him to adopt the remedies provided by the statute. It was noted by this Court in L. Hirday Narain v. CIT26 that if the High Court had entertained a petition despite availability of alternative remedy and heard the parties on merits it would be ordinarily unjustifiable for the High Court to dismiss the same on the ground of non-exhaustion of statutory remedies; unless the High Court finds that factual disputes are involved and it would not be desirable to deal with them in a writ petition."
22. Having heard the Learned Counsels for the parties and considering the materials as well as the observation of Hon'ble Supreme Court as cited by both the parties, let me consider the issues involved in the instant writ petition.
23. The petitioner initially approached the respondent authority for re-constitution of the firm amongst themselves to continue the dealership business, said proposals were refused by the IOCL; so 19 petitioner approached this court in a writ petition. Married daughter of erstwhile dealer namely Sushila Ray, who refused to give "no objection"was the respondent before the Single Bench. The single Bench has disposed of the writ petition with a direction to the authority to re-constitute the firm consisting of the petitioners and give liberty to Sushila Ray to approach Civil Court for declaration of right and title perfected; against the said judgment an appeal is preferred by the respondent authority (IOCL). In the appeal a specific direction was made by the Hon'ble Division Bench upon the authority concern to take a decision. The authority concern has taken the decision which is impugned before this court. The relevant portion of the decision of the authority is required to be set out for proper appreciation of the fact From the foregoing, it is observed that after the death of Smt Siya Roy, the original surviving partners as per dealership agreement dated 29.07.2009, Shri Binoy Kumar Roy and Smt Nisha Roy, have failed to submit a proper reconstitution proposals complying with the extant reconstitution policy guidelines of the Corporation even after giving just and sufficient time for doing so, which is a violation of clause 42 and 46 of the dealership agreement dated 29.07.2009, wherein it is clearly stated and we quote:
QUOTE
42. The Dealer shall at all times faithfully, promptly and diligently observe and perform and carry out at all times all directions, instructions, guidelines and orders given or as may be given from time to time by the Corporation or its representative(s) on safe practices and marketing discipline and/or for the proper carrying on the Dealership of the Corporation. The Dealer shall scrupulously observe and comply with all laws, rules, regulations and requisitions of the Central/State Government and of all authorities appointed by them or either of them including in particular the Chief Controller of Explosives, Government of India and/or any other local authority with regard to the safe practices.20
46. Notwithstanding anything to the contrary herein contained, in the event of the dealer being a partnership firm, the Agreement shall automatically come to an end and stand terminated upon any change in the constitution of the firm, whether by retirement or death of any partner(s), introduction of new partner(s) or otherwise howsoever unless after receipt of a written notice from the original surviving partner(s) of the Dealer firm of such death or retirement or induction. The Corporation shall have expressly agreed in writing to continue the Dealership with the surviving partner(s) or with the re-constituted firm. Any supplies of the products made by the Corporation. subsequent to the death or retirement of a partner or the induction of new partner(s), with or without the knowledge of death or retirement or induction of any other action on the part of the Corporation under or in pursuance of this Agreement subsequent to such death or retirement or induction in favour of or in relation to the surviving partner(s) and/or the reconstituted firm shall not and shall not be deemed to confer any dealership or other rights in favour of the surviving partner(s) and/or the reconstituted farm unless and until the Corporation conveys in writing its specific approval or assents to confer any dealership or other rights upon the surviving partner(s) and/or the reconstituted firm as the case may be and the Corporation shall always be at liberty, without any previous notice to discontinue, withhold or stop any such supplies or perform any such act as it deems fit at its discretion.
UNQUOTE In view of your failure to submit a proper reconstitution proposal in accordance with the extant policy circular functioning under the name and style of M/s Roy and Co. is terminated with immediate effect.
You are hereby advised to handover all equipments of the Corporation, if any, immediately and reconcile your accounts. For this purpose you may, upon prior appointment, meet our Manager (Retail Sales). Bolpur RSA.
This letter is being issued without prejudice to any and all other rights, claims and remedies available to the Corporation under the Law and the Dealership Agreement.
24. It is sole contention of the reasoned order that the petitioners were given sufficient opportunity to produce the required documents (no objection certificate from all the legal heirs of Siya Ray). It is further contention in the reasoned order that as they have failed to 21 produce the required documents. They have violated the Clause 42 and 46 of dealership agreement. Hence they failed to submit to provide re-constitution proposal in accordance with the extent circular/policy, thus their dealership was terminated with immediate effect.
25. It is pertinent to mention herein that before passing the impugned order the present petitioners were running the business by the strength of an interim order passed by the Hon'ble Division Bench.
26. Let me consider whether the impugned order is passed in accordance with the terms of direction of the Hon'ble Division Bench passed in APO No. 43 of 2013. Operative portion of the direction of the Hon'ble Division Bench is set out as follows:-
"The stipulation in the dealership agreement that on the death of a partner the agreement between the appellant and the dealer would stand terminated is not a very fair clause. It is not illegal because in our opinion any person can choose to do business with a firm with a particular constitution. It is true that upon the death of a partner, a partnership firm may be dissolved or it may be re-constituted. There is a state of uncertainty in it. Any person doing business with it is unable to ascertain, in case of its re-constitution, the credentials of the future partners of the firm. A firm is not a juristic entity. So an agreement of dealership with a firm is an agreement to do business with individual partners of the firm jointly and severally. Therefore, when a partner dies the person doing business with it may or may not be willing to do business with the partners of the re-constituted firm. The appellant is a 22 statutory body. It is enjoined with a duty to act fairly and reasonably in contractual matters. It should not act arbitrarily. On the contrary its actions should be rational and just for the appellant to insist that the agreement would permanently stand terminated on the death of a partner is an extreme step. It would be reasonable if for the time being it was terminated. Thereafter the partners of the re-constituted firm and the appellant should have been given an option of entering into a fresh agreement.
In this case there is no complaint regarding the service rendered before or after the death Siya Roy. The appellant has permitted the firm to re-
constitute itself from time to time. It has renewed licences of the re-
constituted firms for a long period of time.
After the death of Siya Roy the firm has been re-constituted with the second and third respondents as partners. The appellant should not be concerned as to the dispute between the second respondent and his half sister. The appellant ought to have examined the past and present performance of the firm with regard to its business of a licensee under it, while considering grant of a new licence.
In those circumstances, this court upholds the decision of the appellant to terminate the agreement. By virtue of the status quo order in this writ the respondent firm continues to be a dealer of the appellant. It shall continue to do so on a temporary basis. The appellant is to take a decision as to whether it will renew the dealership with the reconstituted first respondent on a permanent basis, on the basis of the 23 above observations and after taking all relevant factors into consideration within one year from date.
This appeal is disposed of accordingly.
Certified photocopy of this Judgment and order, if applied for, be supplied to the parties upon compliance with all requisite formalities".
27. For better appreciation of the issue involves in this writ petition it is required to set out the specific portion of re-constitution policy of IOCL Reconstitution of Commissioned dealerships/distributorships 1.5 In cases od death of one of the partner(s) , the partnership shall be reconstituted with the legal heir(s) of the deceased partner(s) and surviving partner(s). However, if there is no legal heir(s) or the legal heir(s) has expressed unwillingness, the dealerships/distributorships shall be reconstitute with the surviving partner(s)
28. Entire over view of this matter makes it clear that a Co-ordinate Bench of this Court while dealing with the matter at the first instance in Writ Petition No. WPA 1240 of 2010, has set out the issue regarding right scope, and opportunity of Sushila Roay to use no objection certificate before IOCL, and has given her liberty to approach the Civil Court. Sushila Ray did not file any appeal against the order rather when respondent authority preferred the appeal, this issue was not agitated. By the strength of judicial pronouncement of a Co-ordinate Bench, it appears that, the issue has been settled and finally decided 24 in that particular case regarding right of approach of Sushila Ray and effect her of non-giving of no objection certificate to the authority concern. The same issue has never been raised before the Hon'ble Division Bench by the concerned respondent authority though the division Bench has specifically pointed out that issue in the judgment regarding the finding of the Co-ordinate Bench.
29. The Division Bench has clearly discussed about the duty of respondent being the statutory authority to dealt with this matter. It appears that as the respondent authority did not raise the issue regarding non-giving of no objection certificate by Sushila Ray, before the Hon'ble Division Bench. Thus at this juncture such issue cannot be agitated again.
30. At the time of passing the reasoned order the concerned authority has put their reliance upon Clause 42 and 46 of dealership agreement dated 29.07.2009. It is surprising to note that the said agreement dated 29.07.2009 has been declared to be terminated not only by the respondent authority themselves but also by the observation of the Hon'ble Division Bench which was determined on the death of Siya Ray. The authority concerned cannot again agitate those clauses of an agreement which has no existence at the time of passing impugned order.
31. The Hon'ble Division bench has unequivocally observed In this case there is no complaint regarding the service rendered before or after the death Siya Roy. The appellant has permitted the firm to re-constitute itself from time to time. It has renewed 25 licences of the re-constituted firms for a long period of time.
After the death of Siya Roy the firm has been re-constituted with the second and third respondents as partners. The appellant should not be concerned as to the dispute between the second respondent and his half sister. The appellant ought to have examined the past and present performance of the firm with regard to its business of a licensee under it, while considering grant of a new licence.
32. This portion of the observation by the Division Bench makes it abundantly clear that the farm can be re-constituted on the basis of past and present performance with regard to its business. There are no instances of complaint or illegalities on behalf of the petitioners in regard to the performance of the business of the petitioners with the respondent authority. Thus the observation of the authority in the impugned order is itself unreasonable and arbitrary. Moreover, it is purely unjust and unreasonable for the respondent authorities to quote clause No. 42 and 46 of dealership agreement dated 29.07.2009 which at present, has no existence at all.
33. Under the above observation I find no justification and reasoning in the impugned order dated 9th July 2019 passed by the competent officer of the respondent authority.
34. Hence the same is set aside.
35. As the respondent authority has not passed the reason order in terms of the direction of the Hon'ble Division Bench of this court in its true letter and spirit, thus, they are hereby directed to allow the re-
26constitution of the petitioner No. 1 with surviving partners (petitioner No. 2 and 3) by passing a reasoned order within 03 weeks from the date of communicate of this order.
36. The reasoned order should follow the directives by Hon'ble Division Bench of this Court in APO 43 of 2013 as well as direction passed by this Court in its true letter and spirit.
37. Under the above observation, writ petition is disposed of.
38. Parties to act upon the server copy and urgent certified copy of the judgment be received from the concerned Dept. on usual terms and conditions.
(Subhendu Samanta, J.)