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2018 Supreme(Cal) 618

IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
AMRITA SINHA, J.
M/s. Bimala Gas Service & Another - Petitioners
Versus
Indian Oil Corporation Limited & Others - Respondents
WP. No. 12206 (W) of 2014
Decided On : 05-10-2018

Advocates Appeared:
For the Petitioners:Amales Ray, Mousumi Bhowal, Deborshi Dhar, Advocates.
For the Respondents:M.S. Yadav, Advocate.

Availability of alternative remedy is not an absolute bar to entertain a writ petition. Fundamental right to carry on trade and earn a living cannot be illegally infringed.

Headnote:

Fraud - LPG Distributorship Termination - Clauses 21, 23(b), 23(c)(i) - The court set aside the termination of the distributorship license of the petitioners, directing restoration within 8-12 weeks.

Fact of the Case:

The petitioners' LPG distributorship termination by IOCL was challenged. The petitioners reconstituted the business from proprietorship to partnership with proper approval. A title suit filed by a third party was dismissed for default.

Finding of the Court:

The termination of the distributorship license was set aside due to lack of proved default on the part of the petitioners. The court directed restoration of the distributorship license within 8-12 weeks.

Issues: Validity of LPG distributorship termination, maintainability of writ petition due to availability of alternative remedy.

Ratio Decidendi: Availability of alternative remedy is not an absolute bar to entertain a writ petition. Remanding the matter back to arbitration would not serve the ends of justice. The fundamental right of the petitioners to carry on trade and earn their living had been illegally infringed.

Final Decision: The termination of the distributorship license of the petitioners was set aside, and IOCL was directed to restore the distributorship license within 8-12 weeks.

JUDGMENT :

1. The impugned order dated 26th March, 2014 terminating the liquefied petroleum gas (LPG for short) distributorship of the petitioners by the respondent Indian Oil Corporation Limited (IOCL for short) is the subject matter of challenge in the instant writ petition.

2. All the parties have been served. An affidavit of service is on record. None appears on behalf of the respondent no. 6 in spite of service. The facts of the case are as follows:

3. Hiralal Sarkar the petitioner no. 3 as sole proprietor of M/s. Bimala Gas Service applied for obtaining LPG distributorship at Dhupguri, district Jalpaiguri sometimes in 1996. A letter of intent was issued in his favour by IOCL on 2nd April, 1996. As per Clause 1.2 of the said letter of intent the distributor was debarred from inducting any partner during the continuation of the distributorship. The said letter of intent was thereafter cancelled by IOCL vide letter dated 6th February, 1997 and was again revived vide letter dated 3rd August, 2000. A formal letter of appointment of the petitioner No.3 as distributor was issued by IOCL on 15th February, 2001. An agreement of distributorship was executed by and between the said Hiralal Sarkar proprietor of M/s. Bimala Gas Service and IOCL on 20th March, 2001. The petitioner No.3 continued with the business for a considerable period of time.

4. Due to ill health Hiralal Sarkar was unable to manage his business effectively. With prior intimation to IOCL he entered into a deed of partnership with his wife the petitioner no. 2 Smt. Sumita Sarkar on 21st May, 2012 for effective management of his business. The deed of partnership was duly registered before the District Sub-Registrar, Jalpaiguri on 24th May, 2012. The reconstitution of the distributorship from proprietorship to partnership was communicated to IOCL who approved the same. On 28th June, 2012 a fresh memorandum of agreement was entered in between the partnership firm of M/s. Bimala Gas Service and IOCL.

5. One Sujit Guha the respondent No. 6 herein filed a title suit being T.S No. 399 of 2012 in the Court of the learned Civil Judge (junior division) at Alipore against IOCL and all the petitioners herein praying for a decree of declaration that the deed of partnership dated 26th December, 2000 entered in between the plaintiff (Sujit Guha) and defendant no. 2 (Hiralal Sarkar) was valid and in the alternative to cancel the distributorship license issued by IOCL in favour of Hiralal Sarkar. In the plaint the primary allegation was that the said Sujit Guha invested a considerable sum of money in setting up the LPG distributorship business of Hiralal Sarkar and the entire business of Hiralal Sarkar was managed and looked after by the plaintiff. Hiralal Sarkar assured the plaintiff that a proper deed of partnership would be executed and Sujit Guha will be made one of the partners of the distributorship business. Instead of executing the deed of partnership with Sujit Guha Hiralal Sarkar executed the deed of partnership with his wife Sumita Sarkar. Both Hiralal Sarkar and Sumita Sarkar played fraud upon the plaintiff and deprived the plaintiff from his legitimate share of profit from the distributorship business. The petitioners herein contested the said Suit and the same was ultimately dismissed for default on 14th September, 2017.

6. The said Sujit Guha also lodged a complaint before the area manager, IOCL on 19th October, 2012 alleging that he had invested huge sum of money in the business of Hiralal Sarkar and he was the person who conducted the day to day business of Hiralal Sarkar. In the said letter it was also alleged that he (Sujit Guha) was forcefully restrained from entering into the office of the distributor due to which he had to suffer financial hardship.

7. Pursuant to the aforesaid complaint lodged by Sujit Guha the respondent No. 6 herein IOCL issued a show cause notice in favour of the petitioner no. 2 on 15th April, 2013. In the said show cause notice the petitioner n





















































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