High Court Of Calcutta
A. K. MATHUR, ASHIM KUMAR BANERJEE
INDIAN OIL CORPORATION LTD. - Appellant
Versus
JHARNA SARKAR - Respondent
W. P. 2086 Of 2002
Decided On : 02/10/2004
INDIAN OIL CORPORATION LTD. V. JHARNA SARKAR - KEROSENE CONTROL ORDER - INTERPRETATION AND APPLICATION - SUPPLY OF KEROSENE OIL THROUGH AGENTS - TERMINATION OF SUPPLY TO AN AGENT - PRINCIPLES OF NATURAL JUSTICE - APPLICABILITY - REVIEW OF ALLOTMENTS - RECTIFICATION OF MISTAKES - EQUITABLE DISTRIBUTION AMONG AGENTS - MAINTENANCE OF BENCHMARK - CANCELLATION OF QUOTA FOR AN OUTLET NOT COVERED BY AGREEMENT - LEGALITY.
Fact of the Case:
Jharna Sarkar, a partnership firm, was appointed as an agent by Indian Oil Corporation Limited (IOCL) for the distribution of kerosene oil in certain areas of Kolkata and 24 Parganas (South) District. In 2000, four separate agreements were entered into between IOCL and Jharna Sarkar for four different areas, but Barisha was not mentioned in any of these agreements. Jharna Sarkar approached the Calcutta High Court seeking a direction to IOCL to include Barisha in the agreement or execute a fresh agreement for the same. The court disposed of the writ petition based on IOCL's submission that Barisha was part of Behala and hence not separately mentioned in the agreement. However, IOCL continued to supply kerosene oil to Jharna Sarkar at Barisha treating it as an independent point, even though there was no separate agreement for the same. Subsequently, IOCL stopped the supply at Barisha after a vigilance enquiry revealed that the supply was being made in violation of the agreement. Jharna Sarkar filed a fresh writ petition challenging the cancellation of quota for Barisha.
Finding of the Court:
The Calcutta High Court held that IOCL was entitled to rectify its mistake in supplying kerosene oil to Jharna Sarkar at Barisha in the absence of an agreement and that the principles of natural justice did not apply in this case. The court observed that Jharna Sarkar was not entitled to an independent quota for Barisha as it was part of Behala and the total quota for Behala and Barisha could not exceed 250 KL per month as per the resolution passed in a meeting held between IOCL and various agents.
Issues: 1. Whether IOCL was justified in terminating the supply of kerosene oil to Jharna Sarkar at Barisha without providing an opportunity of being heard. 2. Whether the principles of natural justice apply to the termination of supply of kerosene oil by IOCL to its agents.
Ratio Decidendi: 1. The court held that the principles of natural justice, including the right to a hearing, did not apply in this case because the supply of kerosene oil to Jharna Sarkar at Barisha was made in violation of the agreement between the parties and was therefore illegal. 2. The court further held that IOCL was entitled to rectify its mistake in supplying kerosene oil to Jharna Sarkar at Barisha and to redistribute the quota among other agents to maintain the benchmark of 250 KL per agent.
Final Decision: The court allowed the appeal filed by IOCL and set aside the judgment of the single judge. The writ petition filed by Jharna Sarkar was dismissed.
( 1 ) INDIAN Oil Corporation Limited the appellant above named is one of the oil companies empowered to deal with kerosene oil. Under the kerosene control order the oil companies are to appoint agents for distribution of kerosene oil on their behalf. In turn the agents are to distribute kerosene to the dealers and in turn dealers to the various retailers. The dealers and/or retailers are appointed by the State whereas agents are appointed by the oil companies.
( 2 ) THE respondent is a partnership firm carrying on business dealing with kerosene oil in the District of 24 Parganas (South) as well as Kolkata. The said firm was initially a proprietorship concern. On September 26, 1966 the said proprietorship concern M/s. Jharna Sarkar was appointed agent by the appellant for dealing with kerosene oil on behalf of the said oil on behalf of the said oil company. In terms of the said agreement appearing at page 115 to 117 of the Paper Book the said proprietorship concern was granted agency in respect of ?dhakshin Para, Barisha in the town of Kolkata?. The proprietorship concern was subsequently converted into a partnership firm and fresh agreement was entered into by the parties on February 28, 1994 appearing at pages 122-129 wherein the area mentioned was as follows:-? behala/barisha P. S. Behala/p. S. Thakurpukur in the District of 24 Parganas (South) West Bengal?.
( 3 ) SUBSEQUENTLY in the year 2000 four separate agreements were entered into by and between the parties on February 14, 2000 appearing at pages 138 to 145. In one of such agreements the area was described as Behala in the District of 24 Parganas (South ). The other three agreements related to other three spots. However, the Barisha was not mentioned in any of the four agreements.
( 4 ) THE respondent immediately moved this Court as and by way of writ petition being AST No. 610 of 2000 inter alia complaining that the four agreements were entered into by the oil company for Behala, Thakurpukur, Bishnupur and Mahestala. However, Barisha was not separately mentioned in any of the said four dealership agreements. Hence, the oil company should be directed to include Barisha in the agreement or execute fresh agreement there for. The said writ petition was disposed of Bhaskar Bhattacharjee, J. by his order dated March 8, 2000 wherein the writ petitioner being the respondent herein did not press their writ petition on the basis of the submission made on behalf of the oil company to the effect that Barisha was part of Behala and as such the Barisha was not mentioned in the fresh dealership agreement. An inter office memo was placed before His Lordship appearing at page 146 of the paper book which provided that since Barisha was part of Behala it was not separately mentioned. It was however mentioned in the said inter office memo that the supply to Barisha had not been discontinued.
( 5 ) THE oil companies, however, continued supplies to the writ petitioners at 5 points by treating Barisha as an independent point irrespective of the fact that no separate agreement was entered into by and between the parties on that score. This fact, however, revealed subsequently on a vigilance enquiry and the oil company stopped supply at Barisha. Hence, this writ petition.
( 6 ) IN the year 2001 the respondent approached this Court by way of a fresh writ proceeding on a different context. The said writ petition was heard by me sitting singly. In the said writ petition being W. P. No. 60 of 2002 the writ petitioner alleged that the oil companies were not distributing oil prorata amongst agents and was making discriminating to the agents. Identical writ petitions were also filed by other agents. I heard all the writ petitions analogously. I also gave notice to the other agents working in the concerned District. Upon hearing all concerned parties I directed the Director, Consumer Goods to convene a meeting of all the concerned parties to evolve an uniform formula of distri
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