IN THE HIGH COURT OF GAUHATI
Sanjay Kumar Medhi, J.
M.P. Jalan And Another - Appellant
Versus
Indian Oil Corpn Ltd And Others - Respondent
Writ Petition (Civil) No. 3549 of 2020
Decided On : 01-02-2021
Article 226 - Stoppage of Petroleum Products Retail Outlet - - The Constitution of India, Article 226 - The issue revolves around stoppage of a retail outlet of petroleum products by the respondents from 22.08.2020 by stopping supply of materials. The court allowed the writ petition and directed the respondent corporation to restore the supply of fuel and all other petroleum products to the petitioners' outlet. If the respondent corporation wishes to consider the reconstitution, it should take on record the proposal submitted on 07.08.2020 for reconstitution and take a final decision strictly in accordance with the Rules and by giving opportunities to the petitioners and any other person who are stakeholders. Such consideration has to be limited only towards the requirements raised in the letter dated 10.07.2020 and cannot embark upon deciding the legality of the partnership as such which can only be decided by a Civil Court of competent jurisdiction.
Fact of the Case:
The petitioners, a partnership firm, challenged the stoppage of supply of petroleum products to their retail outlet by the respondent corporation, alleging it was without notice or opportunity and regarding non-consideration of the reconstitution proposal. The respondent corporation raised issues pertaining to the reconstitution of the partnership and the rejection of the petitioner No. 1's annual return for the financial year 2016-2017.
Finding of the Court:
The court found the stoppage of supply to be unreasonable and arbitrary, and interfered with by directing the respondent corporation to restore the supply of fuel and all other petroleum products to the petitioners' outlet. The court also directed the corporation to consider the reconstitution proposal strictly in accordance with the Rules and by giving opportunities to the petitioners and any other person who are stakeholders.
Issues: The issues revolved around the stoppage of supply of petroleum products to the petitioners' retail outlet, the alleged discrepancies in the reconstitution proposal, and the rejection of the petitioner No. 1's annual return for the financial year 2016-2017.
Ratio Decidendi: The court held that the stoppage of supply was unreasonable and arbitrary, and directed the respondent corporation to restore the supply of fuel and all other petroleum products to the petitioners' outlet. The court also directed the corporation to consider the reconstitution proposal strictly in accordance with the Rules and by giving opportunities to the petitioners and any other person who are stakeholders.
Final Decision: The writ petition was allowed, and the respondent corporation was directed to restore the supply of fuel and all other petroleum products to the petitioners' outlet. If the respondent corporation wishes to consider the reconstitution, it should take on record the proposal submitted on 07.08.2020 for reconstitution and take a final decision strictly in accordance with the Rules and by giving opportunities to the petitioners and any other person who are stakeholders.
JUDGMENT
Sanjay Kumar Medhi, J. - The extra ordinary jurisdiction conferred to this Court by Article 226 of the Constitution of India is sought to be invoked by means of filing of the present petition. The issue revolves around stoppage of a retail outlet of petroleum products by the respondents from 22.08.2020 by stopping supply of materials. Amongst various grounds of challenge, it is alleged that the said stoppage was without any notice or opportunity and further grievance is also regarding non-consideration of the reconstitution proposal of the petitioner no. 1.
2. Before dealing with the issue at hand, it would be convenient to narrate the facts of the case in brief.
3. Two petitioners have joined together in this present petition. While the petitioner no. 1 is a partnership firm, the petitioner no. 2 is one of the partners. The petitioner no. 1 was initially a sole proprietorship and way back in the year, 1967, a dealership/retail outlet/petrol pump was duly allotted to the said firm at Hijuguri in the District of Tinsukia by the Indian Oil Corporation Limited (hereinafter, 'IOC'). In course of time, the constitution of petitioner no. 1 was changed from proprietorship firm to a partnership firm and it is also a fact that the partnership was registered in the year 1989. In the meantime, there were changes of partners and such changes were intimated to the respondent corporation.
4. When the said petrol pump was in operation, a letter dated 10.07.2020 was issued by IOC on the subject "reconstitution of the firm named M/s Mahabir Prasad Jalan" notifying certain discrepancies which was in connection with the firm's constitution. For ready reference, the discrepancy observed by the committee of the Corporation reads as follows:-
"THE PROPOSAL IS CONTRADICTORY. THE WILL SUBMITTED BY MP JALAN STATES THE RETAIL OUTLET SHALL BE IN THE NAME OF RAJESH JALAN, RAMESH JALAN, SURESH JALAN AND SANJAY JALAN. BANK LETTER SHALL BE WITHIN 3 MONTHS OF PROPOSAL. MEDICAL FITNESS CERTIFICATE OF ALL INCOMING TO BE SUBMITTED AUDITED BALANCE SHEET NOT VISIBLE".
The letter made it specific that if the reconstitution proposal was not submitted within 15 days, there will be a suspension of the sales and supplies. It is the case of the petitioners that no opportunity was granted before issuance of the said letter and further that the WILL referred in the letter was not even probated.
5. In response to the said communication, the petitioners wrote letter dated 21.07.2020 whereby certain time was sought for in view of the ongoing pandemic of COVID-19. Ultimately, vide letter dated 07.08.2020, the respondent corporation was apprised with all the facts with supporting documents and the proposal, as directed, was sent. The aforesaid letter dated 07.08.2020 was sent by registered post which was duly received as is evident from the track assignment report. That apart, the said letter was also issued online at the official email id of the respondent corporation. However, without any further correspondence, the supply to the retail outlet of the petitioners was abruptly stopped w.e.f. 22.08.2020 without assigning any reason. Thereafter, a communication was issued on 18.09.2020 by the corporation to the petitioners directing handing over the operation of the retail outlet premises to any other operators on holiday scheme. This letter has been brought on record by filing an additional affidavit dated 25.09.2020. It is the case of the petitioners that the aforesaid letter makes it apparent regarding the oblique intention of transferring the business to a 3rd party.
6. When this writ petition was moved, this Court vide order dated 06.10.2020 while issuing notice, had recorded the basic contentions of the respondent corporation in support of the impugned action, namely:-
i) There were unresolved contentious issues pertaining to the reconstitution of the partnership,
(ii) The annual return submitted by the petitioner No. 1 has been rejected by the system as a result of whic
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