Back
SUPREME COURT OF INDIA
V.GOPALA GOWDA, AMITAVA ROY, JJ.
INDIAN OIL CORPORATION LTD. – APPELLANT
Versus
NILOUFER SIDDIQUI & ORS. – RESPONDENTS
CIVIL APPEAL NO.7266 OF 2009
Decided On : 01-12-2015
(1986) 3 SCC 156; (1990) 3 SCC 752 – Relied upon
1991 Supp (1) SCC 600; (2001) 5 SCC 101 – Referred
(b) Specific Relief Act, 1963 – Section 14(1)(c) – Letter of allotment neither revocable nor becoming void for any reason – Section 14(1)(c) not applicable. (Para 36)
(1991) 1 SCC 533 – Distinguished
Facts of the case:
The appellant-Indian Oil Corporation Limited in the year 1971 invited applications from eligible persons under the scheme for awarding the distributorship of Indane Gas (LPG) Agencies in the town of Muzaffarpur, Bihar. The said distributorship was reserved for ex- defence personnel, war-widows and dependants.
The respondent no.2- Ex- Captain A.S. Siddiqui and respondent no.3-Ex-Captain Jai Narain Prasad Nishad applied for the said distributorship and got it. On 15.10.1971 IOCL offered the said distributorship to respondent nos. 2 and 3 along with a third person provided they agreed to enter into a partnership to run the business of distribution of Indane Gas. However, the third person refused to form partnership.
The IOCL allotted distributorship of Indane Gas to respondent nos.2 and 3.
On 17.11.1971 the partnership deed was signed between respondent nos.2 and 3 to carry on the business of distribution of Indane Gas at Muzzafarpur under the name and style of M/s Happy Homes (respondent no.4).
From 23.03.1972 the partnership firm-M/s Happy Homes started the business of distribution of Indane Gas without the standard agreement by both the respondent nos. 2 and 3. The distributorship continued to be regulated by the terms of the letter of allotment issued by IOCL to them.
The business of the partnership firm went on smoothly for some time. After few months differences arose between the partners i.e., respondent nos. 2 and 3. The interference of IOCL was sought by respondent no. 2 for the settlement of the said dispute. However, IOCL refused to interfere and asked the partners to settle their dispute themselves.
On 27.02.1973 the respondent no. 2 wrote a letter to Directorate General of Resettlement, Ministry of Defence with a copy of the same to the Minister of Defence and the Minister of Petroleum requesting either to split the partnership business into two or to permit him to transfer his share in the partnership in the name of his wife Mrs. Nilofer Siddiqui (respondent no.1) or his father Ex-Captain M. Ozair or the widow of Late Captain M. Ammar in whose partnership he had actually applied for the distributorship.
IOCL refused to accede to the request for transfer of shares made by respondent no.2.
The IOCL terminated the distributorship.
The respondent no.1 instituted a Title Suit seeking declaration that termination of the distributorship by IOCL was illegal, arbitrary and unjustified. The respondent no.1 also prayed for restoration of the distributorship. The trial court dismissed the said suit.
The first appellate court dismissed the appeal and upheld the decision of the trial court.
The High Court allowed the second appeal. It declared that the letter of termination dated 16.01.1978 issued by IOCL in terminating distributorship of respondent no.2 to be illegal, arbitrary and unjustified and gave direction for restoration of the distributorship.
Finding of the Court:
There is no infirmity in the impugned judgment.
Result: Appeal dismissed with cost.
JUDGMENT
V. GOPALA GOWDA, J.
This Civil Appeal is directed against the impugned judgment and order dated 03.07.2007 passed by the High Court of Judicature at Patna in Second Appeal No. 516 of 1988 whereby it has set aside the impugned judgment and orders therein passed by the courts below on the ground that both the courts below not only committed error of record by misconstruing the facts and evidence on record but also ignored the specific provisions of law as well as the necessary and relevant case laws and also wrongly held that the Title Suit No. 68 of 1978 was barred by the principles of res judicata.
2. The facts which are required to appreciate the rival legal contentions urged on behalf of the parties are stated in brief hereunder:
The appellant-Indian Oil Corporation Limited (for short "IOCL") in the year 1971 invited applications from eligible persons under the scheme for awarding the distributorship of Indane Gas (LPG) Agencies in the town of Muzaffarpur, Bihar. The said distributorship was reserved for ex- defence personnel, war-widows and dependants. The respondent no.2- Ex- Captain A.S. Siddiqui and respondent no.3-Ex-Captain Jai Narain Prasad Nishad applied for the said distributorship and got it. On 15.10.1971 IOCL offered the said distributorship to respondent nos. 2 and 3 along with a third person provided they agreed to enter into a partnership to run the business of distribution of Indane Gas. This was done with a view to rehabilitate more ex-servicemen in the country. However, the third person refused to form partnership.
3. The IOCL through its letter no. Sales/LPG/ERN/3623 dated 21.10.1971 (hereinafter referred to as "letter of allotment") allotted distributorship of Indane Gas to respondent nos.2 and 3 subject to the terms and conditions mentioned therein. Condition no.2 of the said letter is stated hereunder:
"Condition no.2: This appointment is subject to the conditions contained in our standard agreement which will be sent to you in due course for your signature and you shall sign and return the same to us." Further condition no.8 of the said letter reads thus:
"TERMINATION: Condition no.8: Notwithstanding anything contained herein, the Corporation shall be at liberty to terminate your distributorship without assigning any reason whatsoever by giving you 30 days notice in writing of intention to do so and upon the expiry of the said notice your distributorship shall stand cancelled and terminated without prejudice to the rights of the Corporation in respect of any matter or thing antecedent to such termination."
4. On 17.11.1971 the partnership deed was signed between respondent nos.2 and 3 to carry on the business of distribution of Indane Gas at Muzzafarpur under the name and style of M/s Happy Homes (respondent no.4) on various terms and conditions. Condition no.12 of the said partnership deed reads thus: "12.No partner shall without the consent of the other partner obtained in writing for the purpose of any of the following acts:- Engage while he is a partner or be directly or indirectly concerned, in may business other, than that of and competing with the business of the firm.
XXX XXX XXX
h. Assign or mortgage his share in the partnership or attempt to introduce and consider as partner..."
5. The respondent no.2 through letter no.59582 dated 04.11.1971 requested the IOCL for supply of the copy of the standard agreement as referred to in condition no.2 of the letter of allotment issued by IOCL. IOCL vide letter dated 12.11.1971 had given an assurance to them to send the said agreement in due course. The respondent no.2 through letter dated 16.12.1971 again requested for a copy of the said standard agreement from IOCL. IOCL vide letter no. 3622 dated 31.12.1971 allayed apprehension of both respondent nos.2 and 3 on the score of non-availability of the said standard agreement and the termination of distributorship. The relevant part of the said letter no. 3622 reads thus:
"...This agreement will be given
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
