IN THE HIGH COURT OF JUDICATURE AT PATNA
MOHIT KUMAR SHAH, J.
M/S Gauri Shankar Indane Service Kuchaikote, District-Gopalganj – Petitioner
Versus
Indian Oil Corporation Ltd. Through Executive Director (ED) – Respondent
Civil Writ Jurisdiction Case No.7295 of 2020
Decided On : 15-01-2021
Government Contract – Petroleum (Indane) Distributorship – Renewal of terminated Distributorship Agreement – Proprietor of petitioner firm had submitted forged documents and made wrong and false statement in his application with regard to his financial status, with aim and object of securing maximum marks of 18 whereas he was entitled only for 2.4 marks – Respondent-Corporation had issued show cause notice to proprietor of petitioner firm and after considering his reply, had terminated Distributorship Agreement of petitioner – Petitioner cannot be permitted to circumvent process of law as also it cannot be permitted to assail order of termination, in garb of present writ petition – There is no rule of respondent-Corporation which permits renewal of a terminated Distributorship on sympathetic grounds, especially in cases where Distributorship has been terminated on account of malpractices/irregularities/breach of Distributorship Agreement/ Violation of MDG – Writ petition dismissed. (Paras 15, 19, 20 and 24)
(2007) 7 SCC 689 ; (2008) 7 SCC 788 ; (2010) 10 SCC 141 ; 1985 Supp SCC 432 ; (2005) 6 SCC 776 ; (1993) 4SCC 10 ; (1995) 3 SCC 757 ; (2007) 14 SCC 108 ; (2003) 11 SCC 584 ; (2002) 6 SCC 308 ; (1989) 4 SCC 187 ; A.I.R. 2020 SC 3050 – Distinguished.
JUDGMENT :
1. The present writ petition has been filed for quashing the order dated 03.06.2020, passed by the General Manager (L.P.G.), Bihar State Office, Indane Oil Corporation Limited, whereby and whereunder the representation of the petitioner dated 23.05.2020 has been rejected.
Facts of the Case
2. The brief facts of the case, according to the petitioner, are that the proprietor of the petitioner firm is Sri Ravi Pandey and his deceased father namely Late Gauri Shankar Pandey had applied for Indane distributorship at Kuchaikote, District-Gopalganj, Bihar under the freedom fighter category and upon being declared successful, the Letter of Intent was issued in favour of the father of Sri Ravi Pandey on 30.10.2008, however unfortunately, he died on 31.10.2008. Thereafter, Sri Ravi Pandey is stated to have applied, vide application dated 17.02.2009, for transfer of his late father's Distributorship, whereupon the respondents had called Sri Ravi Pandey for interview, which was conducted on 26.02.2009. It is stated that the respondent-Corporation had also held field verification and after finding Sri Ravi Pandey to be fully eligible for being granted L.P.G. Distributorship, the Letter of Intent was issued in his favour vide letter dated 08.04.2009. The proprietor of the petitioner firm is stated to have constructed a godown and invested a sum of Rs. 30 lacs approximately for smooth running of the dealership in question. Subsequently, an agreement was executed on 07.09.2009 in between the proprietor of the petitioner firm and the respondent-Corporation for 05 years. A theft is stated to have taken place in the office of the petitioner firm, during the course whereof, the proprietor of the petitioner firm is stated to have lost documents including bank pass-book, leading to filing of an F.I.R. bearing Kuchaikote PS Case no. 6 of 2011 dated 13.01.2011.
3. The further case of the petitioner is that the respondent-Corporation being satisfied with the performance of the petitioner's Distributorship as also upon verification of the requisite documents/ papers submitted by Sri Ravi Pandey for the purposes of renewal of his Distributorship, had renewed the petitioner's Distributorship and a fresh agreement/ renewal agreement dated 25.10.2016 was executed in between Sri Ravi Pandey and the respondent-Corporation. While the petitioner's Distributorship was running smoothly, in order to harass him, his erstwhile employee namely Rajesh Pandey had filed a false complaint dated 16.10.2018, regarding the petitioner having not complied with the mandatory guidelines for the purposes of grant of Distributorship in question. The respondent-Corporation had then issued a show cause notice dated 29.08.2019 to the petitioner herein for the purposes of seeking its reply regarding termination of the Distributorship in question on the ground that fabricated Bank statement and false educational certificates have been submitted by the proprietor of the petitioner firm and his father for the purposes of grant of the Distributorship in question. In the said show cause, it was alleged that though the proprietor of the petitioner firm in his application dated 17.02.2009 had mentioned that he had a balance of Rs. 20,40,000/-in his Savings Bank Account no. 014111 with Siwan Central Co-operative Bank Limited, Siwan, however upon confirmation from the said Bank, the balance in the said account has been found to be a meagre sum of Rs. 2,40,000/-as on 14.02.2009. In the said show cause notice dated 29.08.2019, it was also stated that the aforesaid Bank has also confirmed that the certificates dated 14.02.2009 and 09.03.2009 submitted by the proprietor of the petitioner firm in support of his financial status to the extent that he was having a balance of Rs. 20,40,000/-as on 14.02.2009 in his Bank Account as also the pass-book provided by him along with his application, had not been issued by the said office of the Bank in question. The petitioner is stated to have f
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There is no rule in the Corporation which allows renewal of terminated Distributorship on sympathetic grounds, especially in cases where Distributorship has been terminated on account of malpractices....
The court established that termination of a distributorship must adhere to due process and contractual obligations, emphasizing the need for prior consent in partnership arrangements.
The court emphasized the importance of providing accurate and complete information in the application for dealership agreements, and upheld the contractual grounds for termination based on the incorr....
The court emphasized that termination of business agreements requires adherence to principles of natural justice, including the right to a personal hearing, and that mere allegations without substant....
The main legal point established in the judgment is that the decision-making process must adhere to the principles of natural justice, and any order carrying civil consequences must be made consisten....
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