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2020 Supreme(P&H) 1069
IN THE HIGH COURT OF PUNJAB AND HARYANA
Anil Kshetarpal, J.
Naresh Kumar - Appellant
Versus
Indian Oil Corporation And Others - Respondent
Civil Writ Petition No. 27969 of 2019
Decided On : 10-07-2020
Kanwaljit Singh, Advocate, Ajaivir Singh, Advocate, Ashish Kapoor, Advocate
The refusal to accept the dissolution of a partnership does not result in its revival, and cancellation of distributorship requires evidence of intentional wrong information.
Headnote:
REFUSAL - Partnership Dissolution - Indian Contract Act, 1872, Section 201; Indian Partnership Act, 1932, Section 43 - The court addressed the refusal to accept the deed of dissolution of a partnership at Will by the principal and justified the cancellation of the LPG distributorship by the nationalized oil company based on wrong information provided by the agent.
Fact of the Case:
The case involved the refusal of a nationalized oil company to accept the dissolution of a partnership and the cancellation of an LPG distributorship based on alleged wrong information provided by the agent.
Finding of the Court:
The court found that the refusal to accept the dissolution did not result in the revival of the partnership and that the cancellation of the distributorship was unjustified as the agent did not provide wrong information.
Issues: 1. Refusal to accept partnership dissolution. 2. Justification for LPG distributorship cancellation. 3. Necessity of impleading a new letter of intent holder in the writ petition.
Ratio Decidendi: The refusal to accept the dissolution did not revive the partnership, and the cancellation of the distributorship was unjustified as the agent did not provide wrong information.
Final Decision: The writ petition was allowed, and the orders for distributorship cancellation were set aside, restoring the LPG distributorship in favor of the writ petitioner.
JUDGMENT
Anil Kshetarpal, J. - Learned counsel for the parties have consented to address final arguments through video conferencing on account of restricted functioning of the Courts due to outbreak of COVID-19.
2. In the considered view of this Court, following three issues require adjudication:
1. Whether refusal to accept the deed of dissolution of a partnership at Will of an agent by the principal (nationalized oil company) result in revival of the dissolved partnership firm? Or
If the principal refuses to accept/reject the deed of a partnership firm (an agent), whether the partnership firm would stand revived or can it be said to be continued particularly when a new partnership firm in place of an old firm has been constituted and started its working?
2. Whether a nationalized oil company is justified in cancelling the LPG distributorship on the ground that its agent gave wrong information while submitting an application for allotment, particularly when it is established that neither the information given was wrong nor there is any intention to give wrong information?
3. Whether it is necessary to implead a new letter of intent holder (agent/distributor) of the LPG Distributorship as party-respondent in the writ petition even if governed by a rule of lis pendens?
FACTS
3. In the year 1970, Bharat Petroleum Corporation Limited (hereinafter referred to as "BPCL") opened a retail outlet on a piece of land owned by Sh. Sat Parkash and Smt. Neelam Mittal. The aforesaid retail outlet of petroleum products was permitted to be operated by a partnership firm M/s Mittal & Company with Sh. Sat Parkash (25%), Naresh Kumar (writ petitioner) (25%) and late Sh. Jagdish Rai (50%), both sons of Sat Parkash, as partners. Sh.Jagdish Rai died on 07.02.1999. Thereafter, Smt. Neelam Mittal, widow of Sh.Jagdish Rai, was inducted in place of her late husband. The partnership was at Will. On 23.09.2003, BPCL was informed of reconstitution of the partnership firm as the writ petitioner Naresh Kumar and his father Sh. Sat Parkash decided to relinquish their share in the partnership business. On 26.09.2003, vide document (Annexure P17), the Territory Manager (Retail), Bhatinda informed the General Manager (North), BPCL about reconstitution of the firm with a recommendation that the resignation letters of both the partners be accepted and Smt. Neelam Mittal be allowed to run the retail outlet on temporary basis till completion of the reconstitution formalities. Pursuant thereto, on 02.10.2003 a deed of dissolution was signed by the partners noting that the firm stood dissolved w.e.f. 30.09.2003. Smt. Neelam Mittal on the same day i.e. 02.10.2003 along with Ramesh Kumar Bansal signed a new partnership deed agreeing to continue with the business with same name of the firm M/s Mittal & Company w.e.f. 01.10.2003. Consequently, vide communication dated 03.10.2003, a copy of the dissolution deed dated 02.10.2003 along with the required papers for reconstitution of the firm were submitted to the Territory Manager, BPCL. Further, vide communication dated 20.10.2003, a copy of dissolution deed was also forwarded to the Income-Tax Officer, Moga. A new bank account with HDFC Bank, Gill Park, G.T. Road, Moga, Punjab was opened, depicting with Smt. Neelam Mittal and Ramesh Kumar Bansal, as partners of M/s Mittal & Company. The writ petitioner has also produced the copies of income-tax returns for the assessment years 2004-05, 2005-06 and 2006-07 to support the fact that he did not continue as a partner in the firm after 30.09.2003.
4. The writ petitioner, pursuant to an advertisement issued in the year 2006 by Indian Oil Corporation Limited (hereinafter referred to as "IOCL"), applied for distributorship of Indane gas (LPG). In the aforesaid application dated 16.10.2006, the writ petitioner answered to question No.2 in negative. The question and its answer are extracted as under:
"Does any of the member (including yourself) of your "family unit" is dealer/distribu
