Shambhu Malakar vs Union Of India And Others
2023 Latest Caselaw 1356 Cal

                           In the High Court at Calcutta
                          Constitutional Writ Jurisdiction
                                   Appellate Side

The Hon'ble Justice Sabyasachi Bhattacharyya

                              W.P.A. No.3079 of 2020

                                Shambhu Malakar
                                        Vs.
                             Union of India and others

     For the petitioner                  :   Mr. Surya Prasad Chottopadhyay,
                                             Mr. Arjun Samanta

     For the
     respondent nos.5 and 6          :       Mr. Abhijit Basu,

Mr. Arghya Kamal Das

For the BPCL : Mr. Puspendu Chakraborty, Mr. Arkadipta Sengupta

Hearing concluded on : 17.02.2023

Judgment on : 23.02.2023

Sabyasachi Bhattacharyya, J:-

1. The present dispute revolves around a Liquefied Petroleum Gas (L.P.G.)

distributorship of the Bharat Petroleum Corporation Limited (in short, "the

BPCL"), which is the respondent no. 2 herein.

2. On October 7, 2013, the BPCL had published a newspaper advertisement

for allotment of LPG distributorship at Gopalpur in Nadia, West Bengal.

The same was reserved for the Other Backward Classes (OBC) category.

3. The LPG distributorship was ultimately granted to a partnership firm,

namely "M/s Shib Shakti Bharatgas". The respondent no. 5 (belonging to

the OBC category) and her husband, the respondent no. 6, are the partners

of the said firm. Accordingly, a Letter of Intent was issued in favour of the

respondent no. 5 on September 29, 2014 and a Distribution Agreement

was executed on January 4, 2016 by the BPCL in favour of the firm.

4. The petitioner, who is admittedly not an OBC but a Scheduled Caste

person, allegedly executed two registered lease deeds of twenty years in

favour of the respondent no. 5, both on October 7, 2013, in respect of the

petitioner's land in Gopalpur.

5. On the same date, that is, October 7, 2013, the petitioner also entered into

another notarised agreement with respondent no. 5 for the latter to execute

a partnership deed in favour of the former in respect of the distributorship

upon obtaining the same, with the petitioner as a 95% partner and the

respondent no. 5 a 5% partner.

6. A purported "Deed of Partnership cum Memorandum of Understanding"

was executed between the petitioner and the respondent no. 5 on

November 19, 2014. Again, on November 10, 2015, the petitioner entered

into another Deed of Partnership with the respondent nos. 5 and 6 for

continuing the business of Shib Shakti Bharat Gas with the petitioner

having 90% share and the respondent nos. 5 and 6 having 5% share each

in the profit and loss of the firm.

7. It is argued by learned counsel for the petitioner that the petitioner, in good

faith, had provided the capital for the LPG distributorship and had

obtained tax clearances, conversion certificate, registration, etc. for the

distributorship. It is alleged that thereafter the petitioner successfully

conducted the business of the distributorship and the respondent nos. 5

and 6 did not participate in any manner, apart from taking their share of

profits and salary.

8. However, after a few years, the respondent nos. 5 and 6 allegedly attempted

to take control of the entire business from the petitioner in contravention of

the terms of the agreements entered into between them and in gross breach

of trust.

9. The petitioner has, thus, filed the instant writ petition seeking execution of

a fresh LPG distributorship business by the BPCL in favour of the

petitioner in terms of the agreements between the petitioner and

respondent nos. 5 and 6, intervention by the BPCL and permission to the

petitioner to carry on the LPG distributorship business till adjudication of

the disputes between the petitioner and respondent nos. 5 and 6.

10. Learned counsel for the petitioner, by placing reliance on several clauses of

the documents produced by the petitioner, contends that the respondent

nos. 5 and 6 are duty-bound to formally induct the petitioner as partner to

the distributorship business.

11. Moreover, the petitioner has spent huge resources for running the business

for so long whereas the respondent nos. 5 and 6 took no part in the

success story.

12. The petitioner, acting on the assurance of and on the basis of agreements

with the respondent nos. 5 and 6, invested the land, money and other

resources and single-handedly conducted the business for several years. By

representing himself as a partner of the distributorship business, he

obtained tax clearances, conversion certificate, registration and various

other permissions from the concerned authorities. There was no objection

from any quarter at any point of time.

13. The respondent nos. 5 and 6 are, thus, bound by Estoppel from denying

the rights of the petitioner as a partner in the business, it is argued.

14. Learned counsel for the respondent nos. 5 and 6 submits that a civil suit is

pending at the instance of the said respondents, challenging the

authenticity and legality of the deeds and agreements produced by the

petitioner on the ground of fraud and misrepresentation. Although the said

suit was dismissed for default, a restoration application under Order IX

Rule 9 of the Code of Civil Procedure is pending in connection therewith.

Since the matter is sub judice, no relief can be granted to the petitioner on

the basis of such manufactured documents.

15. Moreover, the petitioner, not being an OBC person, does not qualify for the

distributorship-in-question.

16. Learned counsel for the BPCL argues that no cause of action has been

disclosed in the writ petition against the BPCL. The entire dispute is

between the petitioner and the respondent nos. 5 and 6. There has never

been any communication between the BPCL and the petitioner.

17. Moreover, the BPCL argues that the entire conduct of the petitioner is mala

fide since admittedly, the petitioner, who is not an OBC, has sought to run

the distributorship in the Benami of the respondent nos. 5 and 6, thereby

unlawfully usurping a vacancy specifically reserved for persons of the OBC

category.

18. Upon learning about the writ petition, the BPCL issued a show cause notice

to M/s Shib Shakti Bharatgas on the ground of violation of several clauses

of the distributorship agreement, to which a reply was also given by the

petitioners.

19. In order to ascertain the contours of the distributorship agreement between

the BPCL and the respondent nos. 5 and 6, certain relevant clauses of the

same are to be looked into.

20. Clause 21 of the agreement provides that the distributor shall not sell,

assign, mortgage or part with or otherwise transfer his interest in the

distributorship or the right, interest or benefit conferred on him by the

agreement to any person. In the event of the distributor being a partnership

firm, any change in the constitution of the firm, whether by retirement,

introduction of new partners or otherwise will not be permitted without the

previous written approval of the BPCL notwithstanding that the BPCL may

have dealings with such reconstituted firms or impliedly waived or

condoned the breach or default by the distributor.

21. Clause 23 (b) provides that the distributor himself or both partners (as in

the present case) shall take active part in the management and running of

the distributorship and shall personally supervise the same and shall not

under any circumstances do so through any other person, firm or body.

22. Clause 23 (c) (i) stipulates that the distributor shall not enter into any

arrangement, contract or understanding whereby the operations of the

distributor are or 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.

23. Clause 28 empowers the BPCL to terminate the agreement in case of

violation of any of its terms and on failure to remedy the breach within four

days of the receipt of a written notice from the BPCL in that regard.

24. Both the BPCL and respondent nos. 5 and 6 are contractually bound to the

terms of the distributorship agreement. On the contrary, there is no

agreement between the petitioner and the BPCL which can bind the BPCL.

25. The newspaper advertisement, whereby applications for distributorship

were invited for the present vacancy, clearly specified that the same was

reserved for OBC category candidates, which criterion is not satisfied by

the petitioner. The letter of appointment dated January 4, 2016, given to

respondent no. 5 by the BPCL with regard to the LPG distributorship,

clearly specifies that the appointment as regular LPG distributor of

Bharatgas at Gopalpur was being given under the category 'OBC' on the

terms and conditions of the distributorship agreement.

26. The Detailed Guidelines for Reconstitution of LPG Distributorship, 2020

formulated by the Ministry of Petroleum and Natural Gas of the

Government of India, which binds the BPCL, also acquire relevance in the

context.

27. Sub-Clause 3.14 of the Guidelines speaks of induction of outside category

partner in SC/ST distributorship and does not extend to the OBC category.

28. Sub-Clause 3.16 of the Guidelines provides the process of reconstitution of

commissioned distributorship and contemplates an application by the

distributor, which is subjected to scrutiny of a two-member Reconstitution

Scrutiny Committee (RSC).

29. Sub-Clause 3.20 envisages non-refundable application processing fee and

reconstitution fee for reconstitution of commissioned distributorships.

30. Clause 4 contemplates specific scenarios requiring reconstitution.

31. Sub-Clause 4.5 thereof provides for condoning of cases of change of

constitution done without OMC (Oil Marketing Companies) approval, if

otherwise meeting all conditions/criteria related to reconstitution.

32. Sub-clause 4.5.1 provides for condonation by OMC on one-time basis after

taking a suitable undertaking from the distributor requesting condoning of

the past actions, confirming understanding of the provisions of the

agreement for compliance in future and issuance of Letter of warning by

OMC. In such event, such distributorship would be required to pay a

ratification fee of Rs. 2 lacs or gross distributorship commission on highest

two months' refill sales in preceding year plus applicable GST, whichever is

more. The cases covered by the above clause are, where unauthorized

persons had entered into the distributorship/operated the distributorship

fully or in association with the proprietor/partner(s) by entering into such

arrangements; however, the distributorship has rectified or requested for

rectification of the mistake and reverting to the last approved set-up.

33. Sub-clause 4.5.2 of the Guidelines provides for cases where

distributorships have inducted outside partner(s) without taking approval

from OMC. In such instances, upon request from the distributorship, the

proposal would be considered for approval. Upon reconstitution, the

distributorship would have to pay a ratification fee of Rs. 5 lacs or gross

distributorship commission on highest four months refill sales in preceding

year plus GST, whichever is more, and OMC would issue a letter of

warning. The proposal, when given, has to be scrutinized by the office as

provided therein.

34. Hence, a detailed procedure has been provided even under the Guidelines

in cases where outside partners have been inducted without taking

approval of the OMC. However, none of the pre-requisites, either of a

request by the distributorship, subsequent scrutiny by the concerned

authorities or payment of ratification fees, has taken place in the present

case.

35. Hence, from no perspective can it be said that the writ petitioner was

inducted as a partner into the distributorship at any point of time.

36. Insofar as induction of an outsider is concerned, in any event, the same is

absolutely discretionary on the part of the authorities and there is no right

whatsoever, contractual or legal, of the distributors, far less of the outsider,

to be enforced at the instance of the outsider, here, the petitioner.

37. The purported agreements between the petitioner and the respondent nos.

5 and 6 are not only denied by the latter, those were challenged in a suit

before a competent civil court. Although the suit was dismissed for default,

a restoration application is pending and there was never any conclusive

determination on the issue of veracity, authenticity and/or legality of such

documents.

38. Even if the said documents were to be held authentic, the same are in no

way binding on the BPCL for issuance of a mandamus against the BPCL.

The writ petitioner, at best, has remedies before the civil court in damages

and/or for breach of trust or other remedies in criminal law against the

respondent nos. 5 and 6, since the dispute sought to be raised is entirely a

private dispute between the petitioner and the respondent nos. 5 and 6,

none of whom fall within the category of 'State' under Article 12 of the

Constitution of India.

39. In any event, the said documents would not, by any stretch of imagination,

have binding effect on the BPCL. Moreover, the said purported agreements

are for an illegal consideration, that is, securing the LPG distributorship

earmarked for the OBC category, to which the petitioner does not belong.

Over and above, the documents are contrary to the Guidelines for

Reconstitution of Partnership, 2020, which have statutory force, and also

violate the distributorship agreement between the BPCL and the

respondent nos. 5 and 6. This vitiates the enforceability of the contracts

under the Contract Act.

40. In fact, there is no public law element involved in the present matter at all.

41. Hence, the present writ petition is not even maintainable in the eye of law.

42. In such view of the matter, there is no scope of granting any relief to the

petitioner. Hence, W.P.A. No.3079 of 2020 is dismissed on contest,

however, without any order as to costs.

43. Urgent certified copies, if applied for, be issued to the applicants subject to

compliance of due formalities.

( Sabyasachi Bhattacharyya, J. )