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2019 Supreme(Guj) 110

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
A.Y. Kogje, J.
Saurashtra Trading Agency & Other - Appellants
Vs.
Indian Oil Corporation & Other - Respondents
Special Civil Application No. 9360 of 2015
Decided On : 05-03-2019

Advocates Appeared:
Harshadray A. Dave, Adv., Akshay A. Vakil, Adv.

Headnote:

Constitution of India - Articles 14, 19(1) (g) and 226 - Partnership - It appears that the show cause notice came to be issued upon the petitioners, who are operating in LPG distributorship of the respondent- Corporation - On account of the change in the Constitution of the partnership firm, show cause notice came to be issued by citing clause of the distributorship agreement, which requires signature of partners of the partnership firm - Held, Court has also taken into consideration the decisions by the Deputy General Manager, which was monetized under the sanction note and the Court is satisfied that it was Deputy General Manager GSO, who has approved the action of issuance of the show cause notice and merely the signatory to the show cause notice being subordinate, it cannot be held that the impugned show cause notice is issued by unauthorized person - Lastly, considering the fact that the petition is at the stage where the petitioner is facing show cause notice to the alleged breach of terms of contract, this Court is not inclined to examine merits and demerits pertaining to the contents of the show cause notice - Lest it may affect the proceedings pursuant to such show cause notice - Petition dismissed. (Paras 10, 11)

JUDGMENT :

A.Y. Kogje, J.

This petition is filed under Articles 14, 19(1)(g) and 226 of the Constitution of India against issuance of show cause notice by the respondent- Indian Oil Corporation. The petition is filed with the prayers, as under:

"(A) Your Lordships may be pleased to issue writ of prohibition and/or writ in the nature of prohibition and/or appropriate writ, order or direction to quash and set aside show cause notice dated 7/26.5.2015 and be further pleased to direct to grant and/or consider to grant post facto approval to the reconstitution of petitioner no.1 firm;

(B) Pending admission and final disposal of the present petition, Your Lordships may be pleased to stay the operation and implementation of show cause notice dated 7/26.5.2015;"

2. From the petition, it appears that the show cause notice dated 7.5.2015/26.5.2015 came to be issued upon the petitioners, who are operating in LPG distributorship of the respondent- Corporation. On account of the change in the Constitution of the partnership firm, show cause notice came to be issued by citing clause of the distributorship agreement, which requires signature of partners of the partnership firm. In absence of such signatures on behalf of the partners the sanctity of distributorship agreement could not be maintained. At the stage of issuance of the show cause notice, the present petition is filed.

3. Learned Advocate for the petitioners submitted mainly that the respondent - Corporation was aware of the circumstances on account of which constitution of the partnership firm was changed and after so many years, such drastic action of canceling distributorship by issuing impugned show cause notice is unwarranted. It is further submitted that the impugned show cause notice is issued by an unauthorized person. It is the case of the petitioners that Deputy General Manager is authorized to issue the show cause notice, whereas impugned show cause notice is signed for Deputy General Manager and therefore, the Deputy General Manager is not the show cause notice issuing authority.

4. As against this, learned Advocate for the respondents relying upon the Affidavit in reply stated that as and when issue of change in the constitution came into knowledge of the respondent - Corporation, immediately the show cause notice came to be issued. Pleadings containing the circumstances under which the change in constitution of partnership was made, were not relevant for the purpose of distributorship agreement and or the relation between the respondent-Corporation and petitioner-Partnership firm. Learned Advocate draws attention of this Court to the relevant clause which prohibits distributor from entering into any type of arrangement contract or understanding whereby operation of the distributor is changed directly or indirectly or in part or whole. Learned Advocate for the respondents submitted that the challenge raised is in the realm of law of contract and therefore, the applicant ought not to have invoke the writ jurisdiction, as several factual aspects, require to be considered.

5. Lastly, he submitted that the Corporation, after following due procedure, has arrived at a decision for issuing the show cause notice and that decision was taken by the Deputy General Manager, who is authorized person for issuing the show cause notice. Pursuant to such decision, only communication is made under the signature of a subordinate officer, which does not mean that the impugned show cause notice has been issued by an unauthorized officer.

6. The Court has taken into consideration the contents of the pleadings and documents produced on record and submission made by the Advocate for the Parties. The distributorship agreement is produced in the petition at Annexure-II Clause-23 (c) of which reads as under:

"(I) the Distributor shall not enter into any arrangement, Contract or understanding whereby the operations of the Distributor there under are or may be controlled/carried out and/or financed by any o











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