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1990 Supreme(SC) 134

SUPREME COURT OF INDIA
SABYASACHI MUKHARJI, CJI., AND B.C. RAY, J.
Mahabir Auto Stores and others, Appellants
Versus
Indian Oil Corporation and others, Respondents.
Civil Appeal No.1350 of 1990, Dated 6-3-1990.
Advocates appeared :
Dr. L. M. Singhvi, Sr. Advocate, Dr. A. M.Singhvi and Mr. D. Bhandari, Advocate (N.P) with him, for Appellants; Mr. Harish N. Salve, Mrs. P. Shroff and Mr. S. A. Shroff, Advocates, for Respondents.

Advocates:
A.M.SANGHVI, DALVIR BHANDARI, HARISH N.SLAVE, L.M.SINGHVI, P.SHROFF, S.A.SHROFF

Headnote:

Constitution of India, 1950 – Articles 14, 226 and 298 - Companies Act, 1956 - Partnership firm - Contractual or statutory - Discontinuing supply of all kinds of lubricants - Appellants sought in Writ Petition filed under Article 226 of Constitution before High Court a writ of mandamus against respondent directing it to desist from denying or discontinuing supply of all kinds of lubricants to appellant No. 1 and from ousting, blacklisting, coercing or pressurising appellant No. 1 from business of dealing with all kinds of lubricants supplied by respondent company to have and to continue to supply all kinds of lubricants to appellant firm as was done in past and for maintenance of status quo existing and for payment of necessary damages for period from 28th May, 1983 till date of filing of writ petition before High Court or till decision of the writ petition - Held, It is true that it may not be necessary to give reasons but, in our opinion, in field of this nature fairness must be there to the parties concerned, and having regard to the large number or the long period and the nature of the dealings between the parties, the appellant should have been taken into confidence - Nothing further need be stated or required to be done and we give no directions as to whether reasons should be recorded or hereinafter should be given - In facts and circumstances, it is not necessary to give oral hearing or record reasons as such for decision - Decision should be based on fair play, equity and consideration by an institution like IOC - It must act fairly - It is not our decision which is important but a decision on above basis should be arrived at which should be fair, just and .reasonable - and consistent with good government - which will be arrived at fairly and should be taken after taking persons concerned whose rights/ obligations are affected, into confidence - Fairness in such action should be perceptible, if not transparent - Judgment and Order of High Court set aside – Direction issued – Order accordingly.

Judgment

SABYASACHI MUKHARJI, C.J.I. :- Having heard counsel for the parties and having considered the facts, circumstances and the contentions involved herein, we grant special leave and dispose of the appeal by judgment herein.

2. This appeal arises out of the judgment and order of the High Court of Delhi dated 9th February, 1983, Appellant No. 1 is a partnership firm. The other four appellants are the partners of the said firm. The respondent is a company incorporated under the Indian Companies Act, 1956 and having, inter alia, one of its regional offices at Janpath, New Delhi. The appellants sought in the Writ Petition filed under Article 226 of the Constitution before the High Court a writ of mandamus against the respondent directing it to desist from denying or discontinuing the supply of all kinds of lubricants to the appellant No. 1 and from ousting, blacklisting, coercing or pressurising the appellant No. 1 from the business of dealing with all kinds of lubricants supplied by the respondent company to have and to continue to supply all kinds of lubricants to the appellant firm as was done in the past and for the maintenance of status quo existing on the 27th May, 1953 and for payment of necessary damages for the period from 28th May, 1983 till the date of the filing of the writ petition before the High Court or till the decision of the writ petition.

3. The appellant No. 1, herein referred to as the firm, is a partnership firm, duly registered with the Registrar of Firms, Delhi. The said firm had been carrying on the distribution and sale of all kinds of lubricants and was registered under Sales Tax Act vide Registration No. 1636 dated 22nd October, 1951 and has a goodwill of its own, according to the said appellants, in the entire region of Northern India with expertise and knowledge in the distribution and sale of all kinds of lubricants. The appellants contend that in the past 32 years the appellant firm had acquired a very good reputation and has earned enviable goodwill in the trade.

4. As stated hereinbefore, the respondent company is a statutory body incorporated under the Indian Companies Act, 1956 and have been dealing throughout with the appellant firm since 1965 when the firm became, according to the appellants, its distributor. The appellants claim that the said firm had been appointed as Lube Distributor and the appellant firm have been given the Permanent Customer Code No. 63-01-3115-1022-9-X, according to the appellant. The appellants contend that this was done in due course. it is the further case of the appellants that the lubricants were released by the respondent company to the said appellant firm on 25th January, 1965 by Invoice No. 145668 and thereafter the firm had promoted the sales of the products of the company successfully inasmuch as from February, 1965 to 27th May, 1983 and the firm had received and uplifted the supply of lubricants/ goods each year and the total quantity of lubricants/ goods such lifted had gone up to the extent of 1,11,34,854 litres or kgs. The appellants claimed that the said firm is one of the respondent companys Lube Distributor in Northern India. It was the case of the appellant before the High Court and also before this Court that the said firm had been carrying on business as the Lube Distributor of the respondent company and had been selling all kind of lubricants. The appellants contend that the respondent company had recognized the appellant firm during all this period as ,authorised dealer and a distributor and an agent.

5. It was the case of the appellants before the High Court and they had tried to demonstrate with reference to the various documents, annexures etc. filed by them that the firm had been always carrying business as Lube Distributor of the Company, and has been selling all kinds of lubricants. The appellants further contended that the Company had recognised the firm during all this period as authorised dealer, distributor and agent. Certain letters wer





















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