The central legal point established in the judgment is the duty of the appellant, as a statutory body, to act fairly and reasonably in contractual matters, and the need for rational and just actions in terminating and renewing agreements.

I.P. MUKERJI, J.

1. Indian Oil Corporation Limited, through its manager (the appellants) have preferred this appeal. It is against the judgment and order dated 1st September, 2011, passed by Mr, Justice Tapen Sen in WP No.1240 of 2010 (M/s. Roy and Company & Ors. Vs. The State of West Bengal & Ors.).

The facts are these:-

2. Several years ago Smt. Siya Roy was carrying on a partnership business as a dealer of kerosene under the appellant. Gradually she became old and infirm. On 27th September, 2001 she converted this proprietorship business into a partnership between herself and her eldest son Binoy, the first respondent. The partnership was styled as M/s Roy and Company having its place of business at Bamakshapa Road, Bazarpara, Post Office & Police Station–Rampurhat, District–Birbhum, West Bengal. The appellant accepted this reconstitution.

3. On 24th July, 2009 the firm underwent another reconstitution. The wife of the first respondent, the third respondent was taken in as a partner. A deed of partnership was drawn up and executed by the partners of the reconstituted firm M/s. Roy and Company.

4. The appellant accepted this reconstitution also and on 29th July, 2009 granted it a fresh licence.

On 30th September, 2009 Mrs. Siya Roy died.

5. At this point of time it is necessary to mention the legal heirs of Mrs. Siya Roy. Apart from Binoy she had two other sons Sanjoy and Ranjoy. She also had two married daughters Smt. Sushila Roy and Smt. Chanda Roy. On 11th November, 2009 the second and third respondents made an application to the appellant to reconstitute the firm by themselves. Together with this application they submitted three no objection certificates from Sanjoy, Ranjoy and Chanda. However, their eldest sister Sushila who is about 15 years older than Sanjoy refused to submit her “No objection”.

6. The dispute in the partnership has its roots in the succession to the estate of Siya Roy. Shew Raman Rai had two wives of whom Siya was the elder. The second wife was Lalita Roy. Sushila Roy is the daughter through Siya Roy. Binoy, Sanjoy, Ranjoy and Chanda are the offsprings from the second marriage. The allegation against Binoy is that he is trying to grab his father’s property. Now, it is very important to note certain terms and conditions of the dealership agreement between the appellant and the Roy family. Clauses 45 and 46 are set out below:-

45–Notwithstanding anything to the contrary herein contained, the Corporation shall be at liberty at its entire discretion to terminate this Agreement forthwith upon or at any time after the happening of any of the following events namely:-

(a) If the Dealer shall commit a breach or default of any of the terms, conditions, covenant and stipulations contained in this Agreement.

(b) Upon

(i) the adjudication as insolvent of the Dealer, if he be an individual. ii) The dissolution of the partnership of the Dealer’s firm or the death or adjudication as insolvent of any partner of the firm, if the Dealer be a firm:

(iii) The liquidation, whether voluntary or otherwise or the passing of an effective resolution for winding up if the Dealer be a Company or a Cooperative Society;

(c) If any attachment is levied and continues to be levied for a period of seven days upon the effects of the Dealer or any individual partner for the time being of the Dealer’s firm or any member of the Dealer’s Co-operative Society:

(d) If the Dealer or any partner in the Dealer’s firm or any member of Cooperative Society appointed as Dealer hereunder shall be convicted of a criminal offence:

(e) If a Receiver shall be appointed of any property or assets of the Dealer or of any partner in the Dealer’s firm or of any member of the Dealer’s Cooperative Society and shall not be discharged within seven days of the date of such appointment;

(f) If the licence issued by the relevant authorities for the storage of petroleum product supplied by the Corporation is cancelled or modified or suspended or revoked or is not renewed