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2003 Supreme(Del) 633

High Court Of Delhi
S.SUCHA SINGH ANAND - Appellant
Versus
BHARAT PETROLEUM CORPORATION LTD - Respondent
CIV.WRIT 5453 of 1997
Decided On : 07/22/2003

Advocates Appeared:
CHETAN SHARMA, MITHUN BARSALAY, Vikram Nandrajog

The court balanced the equities and directed the petitioner to make a fresh representation and application before the respondent for the restoration of the petrol pump licence.

Headnote:

termination - petrol pump licence - agreement dated 11. 11. 1974, clause 10 (s) - dissolution of partnership - change in constitution - respondent no. 1 - show cause notice dated 14. 05. 1996 - previous written consent - fresh representation and application - balancing the equities

Fact of the Case:

The petitioner seeks the cancellation and/or quashing of the termination letter dated 26. 12. 1996 regarding the petrol pump licence. The partnership was entered into in 1963 by the petitioner and his brother. The firm was dissolved by an order of the Court in 1995. The respondent issued a show cause notice based on the dissolution of the firm.

Finding of the Court:

The court directed the petitioner to make a fresh representation and application before the respondent, who would consider the question of giving consent under clause 10 (s) afresh. If consent is granted, the licence for the petrol pump would be restored in the name of the petitioner.

Issues: Cancellation of petrol pump licence, interpretation of clause 10 (s) of the agreement, dissolution of partnership, change in constitution, show cause notice, previous written consent, non-commissioning of the plot

Ratio Decidendi: The dissolution or change in constitution did not proceed from the petitioner, and he was opposing the dissolution. The respondent company also cannot be faulted for arranging an alternative site for a petrol pump.

Final Decision: The writ petition is disposed of with the directions for a fresh representation and application before the respondent, who will consider the question of giving consent under clause 10 (s) afresh.

BADAR DURREZ AHMED, J.

( 1 ) THE petitioner seeks the cancellation and/or quashing of the termination letter dated 26. 12. 1996 whereby the petrol pump which was being run by the firm M/s S. K. S. Gurmukh Singh (hereinafter referred to as the Firm ) has been terminated. The petitioner no. 1 was one of the partners in the said firm. The partnership was entered into sometime in 1963 by the petitioner no. 1 and his brother, Gurmukh Singh (respondent no. 2 ). Originally, the petrol pump licence was granted by the respondent no. 1 to the petitioners grand father, i. e. , Late Sardar Kant Singh who died in 1953. Subsequently, by an agreement dated 11. 11. 1974, the licence was granted by the respondent no. 1 to the said firm w. e. f. 01. 01. 1970. Clause 10 (s) of the said agreement reads as under:-

"10. THE LICENSEES HEREBY COVENANT AND AGREE WITH THE COMPANY AS FOLLOWS: -. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxxx xxxx xxxx xxxx xxxx xxxx (s) not to change the constitution of the Licensees firm nor to dissolve the partnership nor admit new member as partner nor allow any partner to withdraw from the partnership without obtaining the previous consent in writing of the Company. "

( 2 ) IT is this clause that has been pressed into action for terminating the licence granted by the said agreement dated 11. 11. 1974. It is alleged by the petitioner that Gurmukh Singh (respondent no. 2) left India and settled in USA in 1970 and the business of the partnership was continued in the firm name by the petitioner no. 1. Gurmukh Singh, however, allegedly returned to India in 1992 and certain disputes arose between the two brothers. The said partnership between the petitioner no. 1 and Gurmukh Singh was a partnership-at-will. Be that as it may, a suit for dissolution was filed in this Court by Gurmukh Singh (respondent no. 2) and by an order dated 17. 10. 1995, a preliminary decree was passed whereby the said firm was dissolved. The issues of valuation and accounting were referred to arbitration by a Division Bench of this Court by an order dated 14. 02. 1996. Those proceedings are continuing.

( 3 ) GURMUKH Singh (respondent no. 2) sent a letter to the respondent no. 1 on 14. 11. 1995 informing the petitioner no. 1 that the said firm had been dissolved and it is on the basis of this letter that the respondent no. 1 issued a show cause notice dated 14. 05. 1996 requiring the petitioner to show cause as to why the licence under the said agreement be not terminated on account of alleged breach of the conditions of the licence in terms of clause 13 (a) (vii) of the said agreement read with clause 10 (s) referred to above. Although the learned counsel for the petitioner states that clause 10 (s) has not been explicitly mentioned in the show cause notice. Subsequent to this show cause notice the petitioner sent his reply dated 27. 05. 1996 and which culminated in the letter dated 26. 12. 1996 which is at page 85 of the Paper Book.

( 4 ) IT is the petitioner s contention that clause 10 (s) would only be applicable if the dissolution or change in constitution had proceeded from the petitioner no. 1 himself. He has done nothing to bring about the situation. In fact, the dissolution of the partnership has been brought about by the respondent no. 2 and ultimately by an order of this Court. It is further clear from a reading of clause 10 (s) of the said agreement that there is no express bar or prohibition against change in constitution or dissolution and that mere change in constitution or dissolution of the partnership would not ipso facto render the licence terminable. The only condition that is put is that such change or dissolution should not be brought about without obtaining the previous written consent of the company, i. e. , respondent no. 1. It is the petitioner no. 1 s contention that such a s





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