2001(1) ALL MR 632
IN THE HIGH COURT OF JUDICATURE AT BOMBAY(AURANGABAD BENCH)
V.K. BARDE AND R.J. KOCHAR, JJ.
M/S. Subhash Choudhary & Co. Vs. Indian Oil Corpn. Ltd.
Writ Petition No. 1534 of 1987
21st July, 2000
Petitioner Counsel: Shri. S. C. BORA
Respondent Counsel: Shri. V. G. GANGAPURWALA
(A) Constitution of India, Arts.226, 14 - Licensed Kerosene Dealer - Termination of dealership - Validity - As per agreement termination could be done on service of notice - Except bare statement in affidavit no office copy or document or registered post acknowledgment showing that notice was sent produced on record - Moreover in view of previous correspondence between parties - Contention of dealer that he was never informed of termination - Upheld - In absence of dealership termination notice - Discontinuance of supply of kerosene - Arbitrary.
AIR 1990 SC 1031 Rel. on. (Paras 8, 9)
(B) Constitution of India, Arts.226, 14 - Petroleum Act (1934), S.23 - Petroleum Rules (1937), R.113 - Essential Commodities Act (1955), S.7 r/w S.3 - Licensed Kerosene Dealer - termination of dealership - Validity - By mere fact of prosecution of dealer under Petroleum Act and Essential Commodities Act Corporation not entitled to cancel dealership - It can terminate dealership on conviction - On acquittal dealer entitled to restoration of suspended supply. (Para 10)
Cases Cited:
Mahabir Auto Stores Vs. Indian Oil Corporation, AIR 1990 SC 1031 [Para 9]
JUDGMENT
Barde, J. :- The petitioner has contended that he is the authorized dealer of the respondent - Indian Oil Corporation, for kerosene and L.D.O. as per the agreement dated 18-11-1966. He was also having the requisite licence for storage and sale of kerosene and L.D.O. issued by the Government authorities. The Petitioner is a partnership firm and R.R. Chaudhary, one of the partners of the firm, was prosecuted by Hingoli Police, for offence punishable under Section 23 of the Indian Petroleum Act, 1934, read with Rule 114(2) of the Indian Petroleum Rules, 1937, as well as, under Section 7 read with Section 3 of the Essential Commodities Act.
2. However, on 5-1-1977, in Criminal Case No. 533/1974, Shri Chaudhary was discharged from the charges for offence punishable under Section 7 read with Section 3 of the Essential Commodities Act, by the Judicial Magistrate (First Class), Hingoli. He was tried only for offence under the Indian Petroleum Act. However, by the judgment dated 30-6-1984, he was acquitted by the learned Judicial Magistrate (First Class), of the said offence. The respondent had discontinued the supply of kerosene and L.D.O. to the petitioner - Firm because of the said criminal proceedings.
3. After the acquittal in the Criminal case, the petitioner on several occasions, from December 1977 to July 1987, requested the respondent to restore the supply of kerosene and L.D.O. to the petitioner - Firm, as per the agreement between the parties. However, the respondent has not restored the supply of kerosene and L.D.O. till the filing of the petition. The petitioner has contended that he was having the licence to deal in kerosene and L.D.O. on the date of filing of the Writ Petition. The petitioner has also contended that the respondent never informed the petitioner, at any time, before 27th May 1985, that the dealership of the petitioner was discontinued. It is, therefore, prayed that a writ of mandamus be issued against the respondent or any other direction or writ directing the respondent to supply kerosene and L.D.O. to the petitioner.
4. The respondent filed the affidavit in reply and has admitted all the facts alleged in the petition but has contended that the dealership of the petitioner was terminated in the year 1975 after giving one month notice as per the Clause No.21 of the agreement and it is, therefore, contended that the petitioner cannot seek continuation of supply of kerosene and L.D.O. The agreement stood terminated by the notice.
5. The learned Counsel for petitioner has argued that the petitioner never received notice of termination of dealership, as alleged by the respondent. He also pointed out that the petitioner had received the letters dated 24th/28th December 1977, 3rd July 1981, 28th January 1985, copies of which are produced on record as Exhibit "B", page nos. 15, 16 and 17, and in none of these letters, the petitioner was informed that his dealership was terminated. Only in the letter dated 27th May 1985, the respondent for the first time informed that the dealership had been terminated long back. However, there also, there is no mention that the notice was sent as per the Clause 21 of the agreement, in the year 1975.
6. The learned Counsel for petitioner has further argued that again the petitioner wrote the letter dated 25-7-1987 to Divisional Manager of the Indian Oil Corporation, Nagpur, and apprised him that at the time of personal visit to Hingoli, he had assured to look into the matter and to restore the supply of kerosene and L.D.O. So, it means, that till July 1987, the matter was only under negotiation and the agreement was never terminated as per the Clause 21 of the agreement.
7. The copy of the agreement is produced on record, and Clause 21 of the agreement between the parties, reads as follows:-
" This Agreement may be terminated by either party upon giving to the other not less than thirty days notice in writing to expire at any time of the intention to terminate it and upon the expiration of any such notice the Agreement shall stand cancelled and revoked but without prejudice to the rights of either party against the other in respect of any matter or thing antecedent to such termination."
While Clause No. 25 makes the provision as to how the notice should be served and it reads as follows :-
" Any notice required to be given to the Dealer by the Corporation shall be deemed to be duly received and served on the Dealer, if such notice has been addressed to the Dealer at his last known address. Any notice required to be given to the Corporation by the Dealer shall be deemed to be duly received by and served on the Corporation if the envelope containing such notice has been addressed to the Corporation at its Office in Bombay and has been sent by Registered post."
8. On going through these two clauses, it is very clear that the respondent, Indian Oil Corporation, could have terminated the agreement of the petitioner by serving one month's notice on the petitioner. No doubt, there is the averment in the affidavit that such notice was given. However, neither the office copy of the notice nor any document indicating that the notice was actually posted on the petitioner's address or any postal acknowledgment regarding receipt of the notice sent by registered post, is produced on record by the respondent. So, if the previous correspondence between the parties is taken into consideration, and this specific fact that there is nothing on record except a bare statement in the affidavit that the notice of termination of agreement as sent by the respondent to the petitioner, we think, there is no substance in the stand taken by the respondent. The petitioner has taken the specific plea in the petition in Ground No. V, that the petitioner was never informed that his dealership was terminated, appears to be correct.
9. The learned Counsel for petitioner has relied upon the ruling of the Apex Court, in the case of Mahabir Auto Stores and others Vs. Indian Oil Corporation and others (AIR 1990 SC 1031), and has contended that as no notice of termination is given by the Corporation, the action of the Corporation, not to supply kerosene and L.D.O., is arbitrary and contrary to the terms of agreement between the parties. Considering the principles laid down by the Apex Court in the said ruling, in the present matter also, we hold that the respondent has arbitrarily discontinued the supply of kerosene and L.D.O. to the petitioner. A notice as contemplated as per Clause 21 of the agreement was not ever served on the petitioner and his dealership was not discontinued or terminated. Only thing is that because of the criminal prosecution, the supply of kerosene and L.D.O. was suspended. But after the acquittal, as there was no other reason to discontinue the supply of kerosene and L.D.O., it ought to have been restored.
10. It also can be said that it was not proper on the part of the respondent to terminate the dealership of the petitioner only on the ground of criminal prosecution. The suspension of the supply till the decision of the criminal prosecution could have been considered as proper action. But till there was decision of the criminal case, the dealership could not have been terminated. If the petitioner's partner had been convinced in the said prosecution, then only there was reason for the respondent to terminate the dealership of the petitioner. But the acquittal of the partner of the petitioner did not give any such cause for the respondent to terminate the dealership of the petitioner. So, from this point of view, the petitioner is entitled to have the supply of kerosene and L.D.O. provided he is having valid licence issued by the authorities for storage and sale of these commodities.
11. Hence, the Writ Petition is allowed. The respondent - Indian Oil Corporation is directed to restore supply of kerosene and L.D.O. to the petitioner as per the terms and conditions of the agreement between the parties, dated 18th January 1966, provided the petitioner - Firm is having a valid licence for storage and sale of the kerosene and L.D.O.