Rakhi Sharma vs Indian Oil Corporation Ltd. & Ors
2023 Latest Caselaw 5572 Cal

                  IN THE HIGH COURT AT CALCUTTA
                 CONSTITUTIONAL WRIT JURISDICTION
                          APPELLATE SIDE


The Hon'ble JUSTICE BIBEK CHAUDHURI


                               WPA/13764/2023

                                  Rakhi Sharma
                                       Vs
                        Indian Oil Corporation Ltd. & Ors.

      For the Petitioner:      Mr. Mr. Kalyan Kumar Bandopadhyay,
                               Mr. Ramesh Dhara,
                               Ms. Mousumi Choudhury.

      For the Respondent No. 1, 2 & 3:

Mr. Amit Nag, Ms. Ranjabati Ray.

      For the State:-          Mr. Washim Ahmed,
                               Mr. Sk. Md. Masud.

      For the respondent No.5:-
                             Mr. Rahul Kumar Singh.

Heard on: 25 August, 2023.
Judgment on: 25 August, 2023.

BIBEK CHAUDHURI, J. : -

1. On the basis of a memorandum of agreement executed on 30th

November, 2020 by and between Mrs. Rakhi Sharma, proprietor of M/s

Sharma Kerosene Agency (SKO) and the Indian Oil Corporation Limited,

the petitioner was granted kerosene/diesel oil dealership.

2. It is not in dispute that on the basis of the said agreement, Director

of Consumer Goods, Food and Supplies Department, Government of West

Bengal granted requisite lincence in favour of the petitioner. It is the case

of the petitioner that she has been running the said business

continuously, uninterruptedly and without any objection from its

customers.

3. On 17th April, 2023 the petitioner received a letter from the

Divisional Retail Sales Head, Durgapur Divisional Office of IOCL alleging,

inter alia, that the IOCL received a complaint on 13th April, 2023 where it

has been alleged that the petitioner has entered into an agreement with

one Sonatan Bera of Purusurah, Hooghly and Avijit Maji of Kendur, Purba

Bardhaman on 8th July, 2021 and thereby violated the terms of dealership

agreement. The petitioner was therefore directed to submit her

explanation within five days of receipt of the letter.

4. From the letter dated 12th April, 2023 annexed with aforesaid letter

issued by the Divisional Retail Sales Head of Indian Oil Corporation, the

petitioner came to know that she allegedly assigned her dealership to

some outsiders, namely, Sonatan Bera and Avijit Maji. The petitioner

flatly denied such allegation and by a letter dated 31st May, 2023 she

stated that the allegation of execution of any agreement on 8th July, 2021

with Sonatan Bera and Avijit Maji is false and any such agreement was

not valid. The dealership in question was solely being operated by the

petitioner. In the said letter the petitioner requested the authorities to

provide her one month time so that she can submit all correct facts

regarding the issue before the Divisional Manager, IOCL. Similarly, the

complainant who allegedly made a complaint against the petitioner of

assignment of dealership in violation of agreement in favour of third

parties, namely, Amal Sankar Nandi, wrote a letter on 9th June, 2023

stating, inter alia, that he did not make any complaint against the

petitioner. She also declared from her knowledge that the petitioner has

been running the dealership business of kerosene oil by herself.

Therefore, he requested the IOCL authority to discard such fake,

fabricated and forged complaint against the petitioner.

5. It is the grievance of the petitioner that on 6th June, 2023 the

Deputy Director of Consumer Goods, Department of Food and Supplies

issued agent wise allocation of superior kerosene oil for the month of

June, 2023 and allocation in favour of the petitioner was stopped without

giving any opportunity to the petitioner even to submit an explanation,

showing cause as to why allocation of superior kerosene oil would not be

stopped from the month of June, 2023.

6. Mr. Kalyan Kumar Bandopadhyay, learned Senior Counsel on

behalf of the petitioner refers to a letter issued by the Divisional Retail

Sales Head of IOCL to the Director of Consumers Goods on 1st June, 2023

requesting him to temporarily suspend superior kerosene oil quota of M/s

Sharma (SKO) Agency, Sonamukhi, Bankura. In the said letter the

Director of Consumer Goods was informed that the petitioner being the

proprietor of M/s Sharma (SKO), Sonamukhi, Bankura has entered into

an agreement with one Sonatan Bera and Avijit Maji on 8th July, 2021 to

meet financial need of the said agency without prior approval of IOCL. A

general power of attorney has also been executed in the name of the said

Avijit Maji. It is alleged that execution of such agreement is in gross

violation of the dealership agreement executed by and between the

petitioner and IOCL and her agency is liable to be terminated. It is also

stated that a committee officer will investigate into the matter and find out

the detailed facts of the case. It is submitted by Mr. Bhattacharya that the

said letter issued by IOCL to the Director of Consumer Goods is

absolutely mala fide and malicious and decision taken by the Director of

Consumer Goods. On the basis of the said letter, deleting the name of the

petitioner from the list of allocation of superior kerosene oil for the month

of June, 2023 is absolutely arbitrary. The petitioner was not given any

opportunity in support of her claim that the agreement was false. The

complainant who allegedly made allegation against the petitioner that she

was not running business and assigned her business in faovur of one

Sonatan Bera and Avijit Maji subsequently retracted from her complaint

stating, inter alia, that the said complaint was fake and forged. Moreover,

she declared from the personal knowledge that Rakhi Sharma has been

running the business personally. Thus, it is contended on behalf of the

petitioner that the entire action by the IOCL as well as the director of

Consumer Goods is arbitrary, mala fide and executed with ill motive.

Therefore, the order dated 6th June, 2023 issued by the Director,

Consumer Goods is liable to be quashed.

7. The learned Advocate on behalf of the IOCL, being respondent No.1,

2 and 3 has filed affidavit-in-opposition controverting entire allegation

made out by the petitioner in her writ petition.

8. The learned Advocate for the petitioner at the outset draws my

attention to Clause 28(a) and 15 of the Agreement executed by Rakhi

Sharma with IOCL. Clause 28(a) of the agreement runs thus:

"28. Except with the previous written consent of the Corporation (which constant the Corporation may in its sole and absolute discretion withhold)

(a) The Dealer shall not enter into any agreement contact or understanding whereby the operations of the Dealer hereunder are or may be controlled, carried out and/or financed by any other persons, firm or company whether directly or indirectly and whether the whole or in part."

9. Clause 15 of the agreement read as hereunder:-

"Notwithstanding anything to the contrary herein contained the Corporation shall be at liberty upon breach by the Dealer of any covenant in this Agreement to stop and/or suspend forthwith all suppliers to the Dealer and/or sales from the premises by the Dealer for such period or periods as the Corporation may think fit, and such right of stoppage and/or suspension of supplies shall be in addition to and/or without prejudice to any other right or remedy of the Corporation under this Agreement or Law. For the purpose of this clause, the General Manager of the corporation for time being at Kolkata shall be the sole Judge as to whether a breach of any convenant of this agreement has been committed by the Dealer. The Dealer shall not be entitled to claim any compensation or damage from the Corporation on account of any such stoppage and/or suspension of supplies."

10. Placing reliance on the said two clauses it is submitted by the

learned Advocate for the petitioner that Clause 28(a) permanently

restrains a dealer from executing any agreement, contract or

understanding by virtue of which the dealership business may be

controlled, carried out and/or financed by any other person, firm or

company whether directly or indirectly and whether in whole or in part.

Therefore, the petitioner is debarred from taking any financial help from

any person to run his/her dealership. Clause 15 empowers the

corporation to suspend forthwith of supplies to the dealer and/or sales

from the premises by the dealers on the ground of breach of agreement by

the dealer.

11. Thus, it is submitted by the learned Advocate for the corporation

that the corporation is not supposed to carry out a long drawn inquiry

before suspending the dealership of the petitioner. It is also submitted by

him that whether the said terms and conditions violates any of the

provision of the Contract Act or whether the said two clauses are

practically in the nature of a void agreement in restrain of trade. This

questions are to be adjudicated upon by the Civil Court. The writ court

has no jurisdiction to conduct an inquiry on disputed question of fact.

Therefore, the instant writ petition is not maintainable.

12. It is also pointed out by the learned Advocate for the respondents

that temporary suspension of allocation of superior kerosene oil quota

against the proprietorship business of the petitioner was not issued by

IOCL. The order was issued by the Deputy Directorate of Consumer

Goods. On due consideration of the letter written by IOCL Authority to the

Director of Consumer Goods. Therefore, IOCL cannot be held liable for the

order of suspension.

13. Through, the learned Advocate for the state respondents,

respondent No.4 hereby filed certain documents which I have referred

hereinabove. The respondent No.4 was not represented at the time of

hearing of the instant writ.

14. In reply, the learned Senior Counsel on behalf of the petitioner

submits placing reliance on the decision of the Hon'ble Supreme Court in

Mohinder Singh Gill & Anr. vs. The Chief Election Commissioner,

New Delhi & Ors. reported in (1978) 1 SCC 405, that when a statutory

functionary makes an order based on certain grounds, its validity must be

judged by the reasons so mentioned and cannot be supplemented by

fresh reasons in the shape of affidavit or otherwise. In the instant case

the Divisional Retail Sales Head of IOCL wrote a letter on 1st June, 2023

to the Director of Consumer Goods stating, inter alia, that M/s Sharma

SKO Agency, Sonamukhi, Bankura had entered into an agreement with

one Santosh Bera and Abhijit Majhi on 8th July, 2021 to meet a financial

need of the said agency. The letter was issued on the basis of a purported

complaint made by one Amal Kumar Nandi but the said Amal Kumar

Nandi restricted from his complaint declaring that the purported

complaint was fake and it was not signed by him. The petitioner in her

letter dated 31st May, 2023 clearly stated that the alleged agreement is

false and she prayed for one month time to submit her detailed

representation in this regard. However, the petitioner was not granted any

time and decision for suspension of allocation of kerosene oil was taken

unilaterally without giving any opportunity of being heard, to the

petitioner. The respondents at present cannot support its decision on the

basis of the alleged documents, viz, power of attorney or deed of

agreement etc which were alleged to be false by the petitioner herself.

15. Mr. Bandopadhyay, refers to a decision in the case of Popcorn

Entertainment & Anr. vs. City Industrial Development Corporation &

Anr. reported in (2007) 9 SCC 593. It is held by the Hon'ble Supreme

Court in the above decision that in Whirlpool Corporation Case (1998) 8

SCC 1, the Hon'ble Supreme Court laid down three clear cut

circumstances wherein the writ petition would be maintainable even in a

contractual matter. Firstly, if the action of the respondent is illegal and

without jurisdiction, secondly, if the principles of natural justice have

been violated and thirdly, if the appellants' fundamental rights have been

violated. It is submitted by Mr. Bandopadhyay that in the instant case the

order written by the regional head of IOCL to the Director of Consumer

Goods requesting him to suspend the allocation of quota of superior

kerosene oil in favour of proprietorship firm of the petitioner was violative

of the principle of natural justice because of the fact that suspension of

dealership business was proposed by the IOCL without providing any

opportunity to the petitioner of hearing. Thus, the basic norm of natural

justice was violated. Moreover, the IOCL as well as the Director of

Consumer Goods, Government of West Bengal passed the impugned order

in utter violation of the fundamental right contained in Section 19(i)(g)

and as a corollary thereof, Article 21 of the Constitution of India, when

the petitioner approached the IOCL authority to hear the opportunity to

prove that the alleged agreements were false, the respondents ought not

to have taken such decision without giving and opportunity to the

petitioner to place her case before them.

16. On the same point the learned Senior Counsel on behalf of the

petitioner refers to a decision in the case of Union of India & Ors. vs.

Tantia Construction Private Limited reported in (2011) 5 SCC 697. In

this decision it is held by the Hon'ble Supreme Court that existence or

availability of arbitration clause in agreement is not bar to invocation of

writ jurisdiction when injustice is caused and rule of law violated.

Constitutional power vested in High Court or Supreme Court cannot be

fettered by any alternative remedy available to authorities.

17. It is urged by the learned Advocate for the respondent No.1, 2 and 3

that the agreement contains arbitration clause and therefore, the

petitioner could have invoked arbitration clause to settle the dispute.

18. It is important to note that the petitioner has not challenged the

lawful authority of the agreement in question executed by the petitioner

and IOCL. The petitioner has approached this Court regarding the

manner as to how the respondents proceeded in this manner on the basis

of a complaint which was subsequently denied to be made by the

complainant and also on the basis of purported agreement and power of

attorney which the petitioner unequivocally declared to be false. The

petitioner was not granted any opportunity to prove her case before the

authorities. She was not summoned to produce documents, if any in

support of her claim. On the other hand, a unilateral request was made

by the IOCL for suspension of dealership of the petitioner temporarily and

the Director of Consumer Goods, State of West Bengal arbitrarily acted on

it.

19. In view of such circumstances, this Court is of the opinion that the

instant writ petition is maintainable and the Director of Consumer Goods

cannot pass the impugned order dated 6th June, 2023 detagging SKO

dealers from M/s Sharma Kerosene Agency by tagging it with M/s Raj

Krishno Supply Agency, Bishnupur. The said order is absolutely arbitrary,

mala fide and violative of the principles of natural justice as well as

fundament rights enshrined in Articles 19(i)(g) and 21 of the Constitution

of India.

20. Accordingly, the order dated 6th June, 2023 passed by the Director

of Consumer goods is set aside and quashed.

21. With the above order the instant writ petition is disposed of on

contest however, under the facts and circumstances without any cost.

(Bibek Chaudhuri, J.)