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2022 Supreme(Online)(KER) 61386
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR &
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY THURSDAY, THE 9TH DAY OF JUNE 2022 / 19TH JYAISHTA, 1944 WA NO. 667 OF 2022 AGAINST THE JUDGMENT IN WP(C) 1993/2022 OF HIGH COURT OF KERALA APPELLANT/S:
1 M/S.MONGAM INDANE SERVICES, REPRESENTED BY ITS MANAGING PARTNER MRS.NISHA.M AGED 40 YEARS BUILDING NO.VII/ 724, PATHIPPARA ROAD, MONGAM .P.O., MALAPPURAM DISTRICT. PIN-673642 REPRESENTED BY ITS MANAGING PARTNER, MRS.NISHA.M, W/O.SAJIN, AGED 40 YEARS, RESIDING AT KILIKKOTTUTHODUVIL HOUSE, MONGAM.P.O., MALAPPURAM DISTRICT. PIN-673642, PIN - 673642
2 MRS.NISHA.M, AGED 40 YEARS W/O.SAJIN, AGED 40 YEARS, MANAGING PARTNER, M/S.MONGAM INDANE SERVICES, INDANE DISTRIBUTOR, RESIDING AT KILIKKOTTUTHODUVIL HOUSE, MONGAM.P.O., MALAPPURAM DISTRICT. PIN-673642, PIN - 673642
3 LAJIN.D.L,AGED 40 YEARS LAJIN.D.L, S/O. LATE DIXON, AGED 40 YEARS, PARTNER OF M/S.MONGAM INDANE SERVICES , INDANE DISTRIBUTOR, RESIDING AT BAGALETH QUARTERS, FEDERAL BANK BUILDING, KOZHIKODE ROAD, MONGAM.P.O., MALAPPURAM DISTRICT. PIN-673642, PIN -
673642 BY ADV R.SURENDRAN RESPONDENT/S:
1 INDIAN OIL CORPORATION LTD., REPRESENTED BY CHIEF GENERAL MANAGER (LPG)
INDIAN OIL CORPORATION LTD., REPRESENTED BY CHIEF GENERAL MANAGER (LPG), INDIAN OIL CORPORATION, KERALA STATE OFFICE, PANAMPILLY AVENUE, PANAMPILLY NAGAR.P.O., COCHIN-682036, PIN - 682036
2 CHIEF AREA MANAGER, INDIAN OIL CORPORATION CHIEF AREA MANAGER, INDIAN OIL CORPORATION, KOZHIKODE AREA OFFICE, II FLOOR, P.M.K.TOWERS, WAYANAD ROAD, CIVIL STATION P.O. KOZHIKODE-673020, PIN - 673020 BY ADV M.GOPIKRISHNAN NAMBIAR SRI. E.K.NANDAKUMAR(SR) FOR RESPONDENTS THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 09.06.2022, ALONG WITH WA.682/2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR &
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY THURSDAY, THE 9TH DAY OF JUNE 2022 / 19TH JYAISHTA, 1944 WA NO. 682 OF 2022 AGAINST THE JUDGMENT IN WP(C) 1058/2022 OF HIGH COURT OF KERALA APPELLANT/S:
M/S. MONGAM INDANE SERVICES, REPRESENTED BY ITS MANAGING PARTNER, MRS.NISHA.M AGED 40 YEARS M/S. MONGAM INDANE SERVICES, BUILDING NO.VII/ 724, PATHIPPARA ROAD, MONGAM .P.O., MALAPPURAM DISTRICT. PIN- 673642 REPRESENTED BY ITS MANAGING PARTNER, MRS.NISHA.M, W/O.SAJIN, AGED 40 YEARS, RESIDING AT KILIKKOTTUTHODUVIL HOUSE, MONGAM.P.O., MALAPPURAM DISTRICT. PIN-673642, PIN -
673642 BY ADV R.SURENDRAN RESPONDENT/S:
1 INDIAN OIL CORPORATION LTD., REPRESENTED BY CHIEF GENERAL MANAGER (LPG)
INDIAN OIL CORPORATION LTD., REPRESENTED BY CHIEF GENERAL MANAGER (LPG), INDIAN OIL CORPORATION, KERALA STATE OFFICE, PANAMPILLY AVENUE, PANAMPILLY NAGAR.P.O., COCHIN-682036 , PIN - 682036
2 CHIEF AREA MANAGER, INDIAN OIL CORPORATION CHIEF AREA MANAGER, INDIAN OIL CORPORATION, KOZHIKODE AREA OFFICE, II FLOOR, P.M.K.TOWERS, WAYANAD ROAD, CIVIL STATION P.O. KOZHIKODE-673020 , PIN - 673020 BY ADV M.GOPIKRISHNAN NAMBIAR SRI. E.K.NANDAKUMAR(SR) FOR RESPONDENTS THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 09.06.2022, ALONG WITH WA.667/2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
Termination of LPG distributorship was upheld due to breaches in partnership structure and false declarations in the application.
Headnote:
Distributorship - Termination of LPG distributorship - Indian Partnership Act, Section 33, Distributorship Agreement Clauses 23 & 28 - The court interpreted the clauses of the distributorship agreement alongside Section 33 of the Indian Partnership Act to uphold the termination of the distributorship for violations related to the identity of partners and submission of false information.
Fact of the Case:
The appellants appealed against the termination of their LPG distributorship by the Indian Oil Corporation, asserting violations of partnership regulations and claiming wrongful termination without proper hearings.
Finding of the Court:
The court found that the expulsion of a partner without Indian Oil Corporation's approval constituted a breach of the distributorship agreement, and the false declaration of marital status invalidated the distributorship.
Issues: Whether the termination of the distributorship was justified based on the expulsion of a partner and false information regarding marital status.
Ratio Decidendi: The court held that the appellants' actions violated the explicit terms of the distributorship agreement and statutory provisions, justifying the termination of their agreement.
Final Decision: The appeals are dismissed, upholding the termination of distributorship.
JUDGMENT
Shaji P. Chaly, J.
The appeals are filed by the one and the same petitioners challenging the common judgment of the learned Single Judge in W. P. (C) No. 1993 of 2022 and W. P. (C) No. 1058 of 2022 dated 22.04.2022 whereby the reliefs sought for by the appellant seeking interference with the termination of LPG distributorship by the Indian Oil Corporation, the 1st respondent, and other allied reliefs were declined.
2. In fact W. P. (C) No. 1058 of 2022 leading to W. A. No. 682 of 2022 was filed by the petitioners seeking direction to the Indian Oil Corporation to provide regular and uninterrupted supply of LPG to the petitioners as and when orders are placed with sufficient funds to meet the bills and for a further mandamus directing the Indian Oil Corporation to give adequate opportunity of personal hearing on Ext. P1 show cause notice issued by the Oil Corporation asking to show cause why the distributorship shall not be terminated, and Ext. P2 explanation offered, before passing a final order in the matter; whereas W. P. (C) No. 1993 of 2022 leading to the connected writ appeal was filed to quash Ext. P15 order dated 07.01.2022 issued by the Indian Oil Corporation terminating the petitioners' distributorship and for a further mandamus directing the Corporation to restore the entire consumers of the petitioners' distributorship with all present bookings for refill and fresh connections as on 06.01.2022 forthwith, and consequently to provide regular and uninterrupted supply of LPG to the petitioners, as and when orders are placed with sufficient funds to meet the bills. Since the appeals are materially connected, on consent, we have heard them together.
3. Material facts for the disposal of the appeals are as follows:-
4. The 2nd appellant in W. A. No. 667 of 2022 namely Nisha M. in her personal capacity got selected for appointment as LPG distributor for the location 'Mongam' in Malappuram District and accordingly, Ext. P1 letter of intent was issued to her. Later it was reconstituted as a partnership firm comprising appellants 2 and 3 and one Binu V. M. Ext. P3 distributorship agreement was signed by all partners and thereafter Ext. P2 partnership agreement was signed by and between the partners. One partner namely Binu V. M. was expelled from the partnership which according to the appellants was in terms of Section 33 of the Indian Partnership Act and clause 12 of Ext. P2 partnership agreement.
5. Matters being so, the Indian Oil Corporation issued Ext. P10 show cause notice alleging that expulsion of Sri. Binu V. M. is in violation of Ext. P3 distributionship agreement and also that the 2nd appellant applied for distributionship suppressing her marriage. The appellants 2 and 3 submitted Exts. P12 and P13 replies to Ext. P10; however from 07.01.2022 the respondent Corporation stopped supply of LPG to the appellants. Hence the partnership firm approached this Court by filing W. P. (C) No. 1058 of 2022 seeking supply of LPG cylinders. While so, Ext P15 termination order was issued which was challenged in W. P. (C) No. 1993 of 2022.
6. The learned Single Judge after taking into account the covenants, and the terms and conditions of the distributorship agreement, the guidelines in force in the subject matter, and the contentions advanced by the rival parties has held as follows:-
“24. The argument of the petitioners is that the term contained in Clause 23(c)(iii) “whether in the identity of its partners or appointment of whole time Office Bearers or Elected Members or in the terms of the Deed of Partnership or by the Bye-laws as the case may be” would take within its ambit only substitution of Partners and amendment of the terms of the partnership, and not expulsion or retirement of a Partner, cannot be accepted. Expulsion of a Partner would indeed change the identity of partnership.
25. The petitioners would urge that Clause 23(c)(iii) should be read along with the terms and conditions of Ext.P2 Partnership Deed. Clause 12 of
