Back
2016 Supreme(Mad) 3120
IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. DURAISWAMY, J.
Sri Venkateswara Service Station a registered Firm by its Managing Partner K.G. Loganathan - Petitioner
Vs.
Bharat Petroleum Corporation Ltd. - Respondents
W.P.No.35310 of 2015 and M.P.Nos.1 to 4 of 2015
Decided On : 29-09-2016
For the Petitioner: Mr. R. Thiagarajan
For the Respondents: Mr. O.R. Santhanakrishnan
The main legal point established in the judgment is that the termination of the dealership was valid as it was in accordance with the provisions of the Petroleum Act, Indian Contract Act, and Specific Relief Act.
Headnote:
Termination - Dealership Agreement - Petroleum Act, 1934, Indian Contract Act, Specific Relief Act - [Breach of Dealership Agreement, Termination of Dealership, Compliance with Petroleum Act, Termination under Indian Contract Act and Specific Relief Act]
Fact of the Case:
The petitioner, a temporary dealer of petroleum products, challenged the termination of his dealership by the respondents. The respondents had suspended sales and supplies due to stock variation and subsequently terminated the dealership. The petitioner filed a suit and obtained an interim injunction. The suit was later dismissed, and the petitioner filed a Civil Revision Petition, which was disposed of in his favor. The respondents then issued a fresh show cause notice and subsequently terminated the dealership. The petitioner contended that the termination was in violation of the previous court orders and principles of natural justice.
Finding of the Court:
The court found that the termination was in accordance with law and upheld the respondents' decision to terminate the dealership. The court noted that the dealership had expired by efflux of time and that the petitioner had failed to comply with the Petroleum Act by not applying for re-testing of the samples. The court also cited provisions of the Indian Contract Act and Specific Relief Act to support the termination.
Issues: The issues involved breach of dealership agreement, compliance with the Petroleum Act, termination under the Indian Contract Act and Specific Relief Act, and the application of principles of natural justice.
Ratio Decidendi: The court held that the termination was valid as the dealership had expired, and the petitioner had failed to comply with the Petroleum Act. The court also emphasized the provisions of the Indian Contract Act and Specific Relief Act in supporting the termination.
Final Decision: The Writ Petition was dismissed, and the termination of the dealership was upheld.
The above Writ Petition has been filed by the petitioner to issue a writ of certiorarified mandamus to call for the records viz., the order of termination of dealership dated 16.10.2015 issued by the 1st respondent and to quash the same and direct the resumption of sales and supplies of the petroleum products to the petitioner's outlet in accordance with Dealership Agreement dated 01.11.1995.
2. The petitioner seeks to challenge the order of termination of his temporary dealership by termination order dated 16.10.2015 in this Writ Petition.
3. It is not in dispute that he was appointed as temporary dealer at Sathangadu on 01.11.1995 ending with 01.05.1996. While so, on 01.11.2000, an inspection was done at the retail outlet and samples of MS and HSD were taken. In the inspection, stock variation was found in MS and HSD in the retail outlet. Therefore, on 04.11.2000, the respondents issued a show cause notice calling for explanation from the petitioner. Pursuant to the stock variation, the sales and supplies were suspended for a period of 45 days commencing from 01.11.2000 to 15.12.2000. The samples taken from the retail outlet were sent to laboratory for tests. By the report dated 28.11.2000, it was found that the samples submitted for laboratory test had failed.
4. On 22.11.2000, the petitioner filed a Civil Suit in C.S.No.880 of 2000 before the Original Side of this Court for the following reliefs:
(a) Declaration that the notice of suspension dated 01.11.2000 is illegal and void;
(b) Mandatory injunction to resume supplies of petroleum products at the retail outlet;
(c) Mandatory injunction for permission to sell petroleum products at the retail outlet;
(d) Permanent injunction restraining the Corporation from cancelling adhoc dealership in respect of the retail outlet except in accordance with law.
In the said suit, the petitioner also filed applications praying for interim injunction, interim mandatory injunction and for direction. In the Original Application in O.A.No.1083 of 2000, an order of interim injunction was granted restraining the respondents herein from cancelling the temporary dealership, except in accordance with law. On 15.12.2000, final orders were passed in O.A.Nos.1082, 1083 of 2000 and A.No.4992 of 2000 in C.S.No.880 of 2000. The operative portion of the final order reads as follows:
(1) The plaintiffs are directed to remove the petroleum products stored in the underground tanks and make them suitable for receiving the new petroleum products from the defendants;
(2) The plaintiffs are directed to make the necessary payments before getting supply of the petroleum products;
(3) The plaintiffs should file an affidavit of undertaking before this Court that they would sell the petroleum products in the condition in which it was received by them and they would not indulge in any other illegal acts;
(4) The defendants are restrained from cancelling the dealership of the plaintiffs till the disposal of the suit, but, however, this will not be a bar if and when the plaintiffs in future violates the terms and conditions of the agreement.
5. Against the order passed in O.A.No.1083 of 2000 in C.S.No.880 of 2000, the respondents herein filed an appeal in O.S.A.No.67 of 2001 and the appeal was disposed of as infructuous. The respondents herein filed an application in A.No.6094 of 2009 in C.S.No.880 of 2000 to dismiss the suit as having become infructuous, since the temporary dealership has come to an end by efflux of time. Subsequently, the suit in C.S.No.880 of 2000 was transferred to the file of the III Additional Judge, City Civil Court and re-numbered as O.S.No.719 of 2011. The application in A.No.6094 of 2009 was re-numbered as I.A.No.7006 of 2011. The trial Court allowed the application in I.A.No.7006 of 2011 and dismissed the suit in O.S.No.719 of 2011 on 13.12.2013. Against which the petitioner herein filed a Civil Revision Petition in C.R.P (NPD).No.1325 of 2014 and this Court by order dated 04.04.2014, while dispo
