LPA 216/2010

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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LPA 216/2010

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Reserved on: 19^th April, 2010

Decided on: 6^th May, 2010

1. SHALIMAR GAS,

(through its partners)

Block B, Pocket F, Site No. 1,

Behind Govt. Middle School,

Gas Godown, Shalimar Bagh,

Delhi-110088

2. MRS. ARUNA NANDA,

BC-1, Second Floor Flat,

Shalimar Bagh, New Delhi.

3. ANIL KUMAR,

GH 5, & 7/577,

Paschim Vihar,

Delhi-110087.

..... Appellants

Through:

Mr. Pardeep Gupta, Mr. Suresh Bharti,

Mr. Laxmibai Leitanthem, Advocates.

versus

1. M/S INDIAN OIL CORPORATION LTD,

Regd. Office: G-9,

All Yavar Jung Marg,

Bandra (East), Mumbai-400 051.

2. M/S INDIAN OIL CORPORATION LIMITED,

(Through its General Manager)

World Trade Centre,

Babar Road, New Delhi-110 001.

..... Respondents

Through:

Mr. Abhinav Vasisht and Mr. Raman

Kumar, Advocates.

2010:DHC:2558-DB

LPA 216/2010

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CORAM:

HON'BLE THE ACTING CHIEF JUSTICE

HON'BLE MS. JUSTICE MUKTA GUPTA

1. Whether the Reporters of local papers may

be allowed to see the judgment?

Not necessary

2. To be referred to Reporter or not?

Not necessary

3. Whether the judgment should be reported

in the Digest?

Not necessary

MUKTA GUPTA, J.

1. The present appeal arises out of the judgment dated 23^rd March, 2010

passed in W.P. (C) No. 13411/2009. The writ Petitioners/Appellants herein

in the said writ petition, inter alia sought quashing of the order dated 9^th

November, 2009 of the Respondent No. 2 terminating its distributorship and a

direction to restore the supply of gas cylinders in terms of Memorandum of

Agreement dated 15^th February, 2007 to the Appellants.

2. The Appellant No.2, widow of late Sqn. Leader Ramesh Nanda, who

was killed in an air crash in the year 1978 in the course of his duty, was

allotted an Indane gas distributorship as a sole proprietor of M/s Shalimar

Gas, the Appellant No. 1. The Appellant No. 2 continued looking after the

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LPA 216/2010

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management of the Appellant No. 1 till 2003 herself or with the help of the

two daughters.

3. On 26^th February, 2003 the Appellant No. 1 was converted into a

partnership firm with the Appellant No. 2 and her two daughters as partners.

After the marriage of her daughters, the Appellant No. 2 entered into a

partnership with Appellant No. 3 Anil Kumar on 21^st December, 2006 with

51% and 49% shares respectively. According to the Respondents from the

letter of the Appellant No.2 and inquiry conducted, they came to the

conclusion that the Appellant No.2 has assigned/transferred the interest of the

distributorship in violation of the terms and conditions of the distributorship

agreement and got the approval for reconstitution of the firm by

misrepresentation to the Corporation even though the distributorship had

already change hands. Hence, the Appellant‟s distributorship agreement was

cancelled vide letter dated 9^th November, 2009.

4. Aggrieved by the cancellation, the Appellants filed the writ petition

before the learned Single Judge which was dismissed vide the impugned order

dated 23^rd March, 2010.

5. As per the learned counsel for the Appellants the present is not a case

where the Appellant No.2 has sold the agency, but because of her ill health

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LPA 216/2010

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she could not be an active partner and thus was not available for day-to-day

signing. However, she continued to maintain the major shares and thus the

Distributorship Agreement is not liable to be cancelled. According to him in a

partnership, either of the partners can sign the documents. It is stated that in

terms of Clause 27 (a) a written notice to remedy the breach was essential. It

is further contended that the termination is in violation of clauses 21 and 23 of

the agreement.

6. On the other hand learned counsel for