IN THE HIGH COURT AT CALCUTTA
MOUSHUMI BHATTACHARYA, J.
Anup Kumar Biswas – Appellant
Versus
Union of India & Ors. – Respondents
W.P.A 17467 of 2021 with IA No. CAN 1 of 2022
Decided on : 23-03-2023.
Distributorship Agreement - Petitioner claims to be a person with disabilities having applied for and obtained the LPG license under the “Physically Handicapped” category – Held, entire issue in any event becomes academic in view of a letter written by petitioner to IOC stating that petitioner wants to induct the private respondent no. 6 as only legal heir of his deceased brother as a partner to Distributorship subject to the consent of the private respondent. The petitioner had also sought for 15-20 days to complete all the formalities. This letter is part of records before Court. The petitioner hence cannot resile from that position - Document under challenge merely threatens suspension of Distributorship with effect - The writ petition was filed soon after that. Since IOC did not take any steps against the petitioner for suspension, the writ petition is also premature - The petitioner has not been able to show any act on the part of IOC which has curtailed any of the petitioner’s rights under the Constitution of India warranting interference of the writ court - WPA dismissed.
JUDGMENT :
Moushumi Bhattacharya, J.
1. The petitioner has challenged a letter dated 27.10.2021 issued by the Indian Oil Corporation Limited (IOC) addressed to the petitioner whereby the petitioner has been asked to furnish documents for reconstitution of the Partnership Firm M/s. Ashadeep Gas Services failing which the petitioner’s Distributorship would be suspended with effect from 1.11.2021.
2. The petitioner claims to be a person with disabilities having applied for and obtained the LPG license under the “Physically Handicapped” category.
3. The petitioner is essentially aggrieved by IOC’s insistence for reconstitution of the Partnership Firm as the petitioner is not willing to induct the private respondent no. 6, who is the daughter of the petitioner’s deceased brother and erstwhile partner of the firm. The petitioner’s brother died on 30.4.2021. The petitioner informed IOC of the passing away of his brother on 1.5.2021.
4. Learned Counsel appearing for the petitioner relies on Clause 10 of the Deed of Partnership to submit that on the death of any partner, the remaining partner will be at liberty to carry on the business of the Partnership Firm as the sole proprietor and that induction of the heirs of the deceased partner will be according to the wish of the surviving partner. Counsel also relies on Clause 17 of the Deed which provides for the surviving partner continuing as the sole proprietor. Counsel submits that the petitioner intends to carry on the Distributorship as the sole proprietor as the petitioner was selected in his individual capacity in the PwD category and that the petitioner inducted his brother only for facilitation of the business at the relevant point of time.
5. Learned counsel appearing for IOC relies on Clauses 3.7 and 3.9 of the Reconstitution Guidelines, 2020 which requires reconstitution of the Partnership Firm with the surviving partner and persons nominated by the deceased partner. Counsel further relies on Clause 21 of the Distributorship Agreement which casts an obligation on the Distributor to inform IOC giving necessary particulars of the heirs and legal representatives of the deceased partner.
6. Learned counsel appearing for the private respondent no. 6 submits that the writ petition is premature since no prejudicial measures have been initiated against the petitioner.
7. Ashadeep Gas Services is the Distributor and the party with which IOC entered into the agreement on 30.3.2018. The petitioner inducted his brother as a partner on 27.9.2016 citing the plea of the petitioner’s disability. The petitioner’s brother was hence a partner of Ashadeep at the time of execution of the Distributorship Agreement on 30.3.2018. The petitioner’s brother died on 30.4.2021 and IOC wrote to Ashadeep on 5.5.2021 requesting for a fresh reconstitution of the Distributorship within 6 months, i.e., by 31.10.2021. According to counsel, the petitioner is not willing to induct the surviving heir of the petitioner’s deceased brother. The petitioner relies on several clauses of the Partnership Deed which permit the petitioner to carry on the business of the Partnership Firm as the sole proprietor.
8. Clause 21 of the Distributorship Agreement provides that in the event of death of any of the partners, the Distributor shall immediately inform the Corporation (IOC) giving necessary particulars of the heirs and legal representatives of the deceased partner and the Corporation shall have the option of either to continue the distributorship with the said firm or to have a fresh agreement of distributorship with any reconstituted firm or to terminate the distributorship agreement. The clause further provides that the decision of the Corporation shall be final and binding on all the parties concerned. Clause 23(a) further provides that the Distributor (the petitioner in this case) undertakes to promptly carry out and perform all the directions and orders made by the Corporation.
9. Clause 21 makes it clear that IOC is entitled to
Indian Oil Corporation Ltd. vs. Roy and Company; (2018) 1 CHN 199
Ramana Dayaram Shetty vs. International Airport Authority of India; (1979) 3 SCC 489
SupremeToday
Legal heirs of a deceased sole proprietor are entitled to reconstitute a distributorship without excluding other legal heirs.
Partnership continuity is upheld despite partner's death; firms may operate with surviving partners and defined heirs per partnership agreement.
The rejection of a partnership reconstitution application based on penalty demands is arbitrary and contrary to the Indian Partnership Act and applicable guidelines.
The court's decision emphasized the importance of complying with the terms of the agreement and the reconstitution guidelines, highlighting the significance of producing necessary documents for partn....
A partnership continues despite a partner's death if the partnership deed facilitates it; statutory authorities must act equitably and cannot arbitrarily disrupt business continuity.
The main legal point established in the judgment is that the reconstitution of a partnership firm and the grant of a distributorship license must comply with the provisions of the Partnership Act, 19....
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