IN THE HIGH COURT OF CALCUTTA
Debangsu Basak, J.
Mahadeb Automobiles and Another - Appellants
Vs.
Indian Oil Corporation Ltd and Others - Respondents
Writ Petition No. 11430 of 2015
Decided On : 14-12-2018
Termination - dealership agreement - (1991) 1 SCC 588, (1967) AIR SC 1269, (1991) 1 SCC 533, (2008) 8 SCC 172, (2007) 14 SCC 680, (2000) 7 SCC 764 - The court discussed the termination of a dealership agreement, breach of principles of natural justice, and the maintainability of a writ petition in the presence of an arbitration agreement.
Fact of the Case:
The petitioners challenged the termination of their dealership agreement by the Oil Company, citing breach of principles of natural justice. The Oil Company terminated the dealership based on an investigation report that was not made available to the petitioners.
Finding of the Court:
The court found that the termination decision was vitiated by breach of principles of natural justice as the investigation report, which formed the basis of the decision, was not provided to the petitioners. The court quashed the termination and allowed the dealership to be reinstated.
Issues: The issues included the maintainability of the writ petition in the presence of an arbitration agreement, breach of principles of natural justice in the termination decision, and the validity of the show-cause notices issued by the Oil Company.
Ratio Decidendi: The court held that the termination decision must be informed by reasons and adhere to the principles of natural justice. It emphasized that administrative actions affecting individual rights must afford a reasonable opportunity of hearing to meet the charges made against the individual.
Final Decision: The court quashed the termination of the dealership agreement, reinstated the dealership in favor of the petitioners, and allowed the parties to resort to the dealership agreement to govern their relationship.
Debangsu Basak, J.
1. Termination of a dealership agreement is under challenge in the present writ petition.
2. Learned Senior Advocate appearing on behalf of the petitioners submits that, the Oil Company issued an advertisement dated August 6, 2003 inviting applications for grant of dealership. Pursuant to which, the petitioners applied. Such application dated November 10, 2003 was evaluated by the Oil Company and the dealership was awarded. Subsequently, the petitioners received a notice dated December 10, 2009 from the Oil Company requiring the petitioners to show-cause with regard to four charges given in the show-cause notice. The petitioners replied thereto by a writing dated December 18, 2009. The petitioners did not hear anything on the show-cause notice and assumed that, the first show-cause notice stood dropped. However, the petitioners received a show-cause notice dated December 31, 2010. In the second show-cause notice, it is alleged that, the petitioners had taken the resources of the Corporation illegally and un-authorizedly and submitted the same to the Investigating Agency to defend the dealership. Such second show-cause notice was replied to by a writing dated January 17, 2011. By the impugned termination letter dated May 14, 2015, the authorities found that, based on investigation conducted by the Oil Company, report of which was not made available to the petitioners that, the petitioners are guilty of inserting documents relating to finance and tide volume. He submits that, the finding in the termination notice is beyond the second show-cause notice. Therefore, such finding cannot be sustained. Moreover, the charge of theft made as against the petitioners is without any basis as the application for grant of dealership was evaluated by the Oil Company, on the basis of the documents made available by the petitioners. Therefore, the question of the petitioners stealing any document from the Oil Company relating to the application made by the petitioners for grant of dealership does not arise. He points out that, the impugned termination notice is vitiated by the breach of principles of natural justice. The impugned termination notice refers to an investigation and a report of such investigation. The petitioners were not made over copies of such investigation report. In support of his contentions that, principles of natural justice must be adhered to while the administration makes a decision, he relies upon (Union of India and Others vs. Mohd. Ramzan Khan, (1991) 1 SCC 588). Referring to (State of Orissa vs. Dr. (Miss) Binapani Dei and Ors., (1967) AIR SC 1269), he submits that, the Oil Company did not make over the investigation report to the petitioners. In such circumstances, he submits that, the impugned action of termination should be quashed.
3. Learned Advocate appearing on behalf of the Oil Company questions the maintainability of the writ petition. He submits that, the contract is non-statutory. The contract contemplates an alternative forum for adjudication of the disputes. The disputes between the parties are such that, the parties should be asked to avail of the chosen forum. In support of such contentions, he relies upon (Indian Oil Corporation Ltd. vs. Amritsar Gas Service and Others, (1991) 1 SCC 533), (Pimpri Chinchwad Municipal Corporation and Others vs. Gayatri Construction Company and Another, (2008) 8 SCC 172) and (Empire Jute Company Limited and Another vs. Jute Corporation of India Limited and Another, (2007) 14 SCC 680). Relying upon (E. Venkatakrishna vs. Indian Oil Corporation and Another, (2000) 7 SCC 764).
4. Learned Advocate appearing on behalf of the Oil Company submits that, where, there is an arbitration agreement, a writ petition should not be entertained. He draws the attention of the Court to the first and the second show-cause notice as well as the replies thereto. He submits that, the petitioners were aware of the investigation conducted by the Oil Company. The petitione
E. Venkatakrishna vs. Indian Oil Corporation and Another
Empire Jute Company Limited and Another vs. Jute Corporation of India Limited and Another
Indian Oil Corporation Ltd. vs. Amritsar Gas Service and Others
Pimpri Chinchwad Municipal Corporation and Others vs. Gayatri Construction Company and Another
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