The nominee of a convicted distributor has the right to seek reconstitution of the distributorship as per the guidelines, even after the termination of the distributorship.

ORDER :

Arun Monga, J.

1. Quashing herein, inter alia, has been sought of an order dated 16.03.2020(Annexure P-18), whereby Liquefied Petroleum Gas (LPG) Distributorship of the petitioner No. 1 firm, operational for the last 33 years, was terminated. A consequential relief has also been sought that application dated 19.07.2019 of the nominee/wife(petitioner No. 3) of proprietor (petitioner No. 2) of the distributor firm, be re-considered for substituting her as the proprietor in the Distributorship, in place of her husband.

2. The genesis of lisin hand is involvement of petitioner No. 2 as a prime accused in FIR No. 124 dated 24.01.2017, registered under Sections 148, 149, 302, 427, 201, 120-B IPC, pursuant whereto in the criminal trial he was later held guilty by the Sessions Court and convicted, inter alia, under Section 302 IPC and awarded life imprisonment vide judgment dated 19.10.2019. Appeal bearing No. CRA-D-954 of 2019 against his conviction is stated to be pending before this Court and the same has not come up for hearing due to heavy pendency of cases before this Court.

3. In the interregnum of registration of FIR and conclusion of the criminal trial of petitioner No. 2,' he nominated his wife as his nominee for being substituted as Proprietor of the LPG distributorship. Petitioner No. 2 and 3 then jointly filed an application dated 19.07.2019 seeking reconstitution of the distributorship.

4. Without taking any decision on the pending application of the petitioner No. 3/nominee-wife, respondent No. 1 Bharat Petroleum Corporation Limited (Oil Management Company-OMC) invoked Clause 28(d) of the distributorship agreement and passed an order dated 19.10.2019, whereby distribution ship of LPG was suspended. It would be apposite to reproduce the relevant of Clause 28 of the agreement, as below:-

"28. Notwithstanding anything to the contrary herein contained, the corporation shall also be at liberty at his entire discretion to terminate this agreement forthwith upon or at any time after the happening of any of the following events, namely,

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(d) If the distributor or any partner in the distributor's firm or any whole time of office bearer of the cooperative society appointed as distributor hereunder shall be involved in any criminal offence relating to moral turpitude."

(Emphasis supplied)

5. Subsequently, application dated 19.07.2019 seeking reconstitution of the distributorship by petitioner No. 3 was also rejected by the OMC. Instead, the distributorship itself, earlier under suspension, was terminated vide impugned order dated 16.03.2020. Hence, the writ petition.

6. In return filed by OMC, a preliminary objection, inter alia, has been taken with regard to the maintainability of the writ petition on the ground that there is an arbitration clause in the distributorship agreement and once the parties have accepted and signed the clause, the writ petition is not maintainable and arbitration proceedings ought to have been resorted to by the aggrieved party.

7. Before dwelling on the merits of the case, it would, therefore, be appropriate to deal with preliminary objection first.

8. Clause 38 of the agreement specifically provides for referring of the dispute between parties to the sole arbitration of Director (Marketing) of the Corporation or of some officer of the Corporation, who may be nominated.

9. Indisputably, petitioner No. 2 and respondent No. 1/OMC have signed the arbitration clause. Any grievance/dispute between them has, therefore, necessarily to be referred to an arbitrator. To that extent, it is held that writ petition against respondent OMC is not maintainable on behalf of petitioner No. 2.

10. Accordingly, as regards the challenge to the termination of distributorship vide impugned order dated 16.03.2020, to that extent the writ petition is dismissed, with liberty to petitioner No. 2 to approach this Court after the decision of his pending criminal appeal, in case he is acquitted and his distributorship is thereafter n