Indian Oil Corporation Ltd. & Ors vs Prabir Kumar Baidya & Ors
2023 Latest Caselaw 3336 Cal

                  IN THE HIGH COURT AT CALCUTTA
                      Civil Appellate Jurisdiction
                             Appellate side

PRESENT:

HON'BLE JUSTICE CHITTA RANJAN DASH
              AND
HON'BLE JUSTICE PARTHA SARATHI SEN

                               MAT 151 OF 2022

                      Indian Oil Corporation Ltd. & Ors.
                                     vs.
                         Prabir Kumar Baidya & Ors.


For the Appellants                  :     Mr. Jishnu Saha, Sr. Adv.
                                          Mr. M. S. Yadav, Adv.
                                          Ms. Satabdi Naskar, Adv.

For the Respondent No. 1            :     Mr. Biswaroop Bhattacharya, Adv.

Mr. Pritam Choudhury, Adv.

Ms. Priti Banerjee, Adv.

Mr. Abhisek Addhya, Adv.

Heard on : 31.08.2022, 08.09.2022, 16.11.2022, 17.11.2022, 05.12.2022, 16.12.2022 & 04.01.2023.

Judgment on                         :     11.05.2023.


CHITTA RANJAN DASH, J.:-

1. Judgement passed by Hon'ble Single Judge on 14.01.2022 in WPA 10713 of

2021 is brought under challenge in this appeal by respondents Oil Company.

2. A compendium of facts relevant for disposal of this appeal runs as follows :-

(a) Following due procedure under the brochure and

guidelines agreement for LPG distributorship in favour

of the respondent no.1 (writ petitioner) was executed

between the competent authority of the present

appellants and the respondent no. 1 on 29.01.1990.

(b) The respondent no. 1 allegedly entered into a

partnership agreement with the private respondent no.

3 (Swati Rai) on 09.11.2016 whereby and whereunder

the present respondent no.1 (writ petitioner) agreed to

change the constitution of the proprietorship to a

partnership by inducting present respondent no. 3

(Swati Rai) as his partner and by agreeing to retire from

the partnership altogether after five years upon handing

over the entire distributorship to respondent no. 3

(Swati Rai). On 9.11.2016 itself, present respondent

no.1 (writ petitioner) also executed a power of attorney

in favour of respondent no. 3 (Swati Rai) giving her, inter

alia, the right to work, manage, control and supervise

the management of the distributorship.

Aforesaid act of the present respondent no. 1 (writ

petitioner) was alleged to be violative of Clause 21 of the

distributorship agreement.

(c) Such action of present respondent no. 1 (writ petitioner)

came to the knowledge of the competent authority of the

Oil Company on the basis of a complaint made by

present respondent no. 3 (Swati Rai) on 23.04.2018.

(d) On receipt of the aforesaid complaint a meeting was

called by the competent authority of the appellants to

ascertain the veracity of such complaint. In the said

meeting the present respondent no. 1 (writ petitioner) is

alleged to have accepted the fact that he had entered

into a partnership with respondent no. 3 (Swati Rai) and

he also allegedly admitted to have executed a power of

attorney in her favour.

(e) The gist of the aforesaid meeting as recorded by the

competent authority of the appellants was issued vide

communication of the appellants to present respondent

no. 1 (writ petitioner) on 09.05.2018.

(f) The present respondent no. 1 (writ petitioner) responded

to the communication of the appellants dated

09.05.2018 wherein he (respondent no. 1) stated that he

is in the process of cancelling the agreement of

partnership and undertook that he shall complete the

process very soon. Thereafter respondent no. 1 (writ

petitioner) forwarded to the competent authority of the

appellants a deed of cancellation of the partnership

agreement bearing signature of respondent no. 3 (Swati

Rai) dated 29.06.2018 and a deed of revocation of power

of attorney dated 03.08.2018 executed in her (Swati

Rai's) favour on 09.11.2016.

(g) Owing to admitted violation of the terms of the

distributorship agreement, respondent no. 1 (writ

petitioner) was issued with a show-cause notice dated

16.10.2018 which, inter alia, recorded that respondent

no. 1 (writ petitioner) had admitted the execution of the

partnership agreement with respondent no. 3 (Swati

Rai).

(h) Respondent no. 1 (writ petitioner) replied to the show-

cause notice on 19.12.2018 admitting the factum of

creation of partnership, receipt of money from

respondent no. 3 (Swati Rai), his intention to return the

money to Swati Rai and further sought for condonation

of the violation upon agreeing to pay requisite

ratification fees as per new reconstitution policy which

came into force during 2018.

(i) Clause 4.5 of detailed guidelines for reconstitution of

LPG distributorship, 2018 authorises the competent

authority of the appellants' oil company to condone the

violation committed by a dealer on payment of requisite

ratification fees provided in Clause 4.5.1. On the basis

of the show-cause reply of the respondent no. 1 (writ

petitioner) dated 19.12.2018, the competent authority of

the appellants accepted the ratification fees of Rs.

16,54,846.75/- from respondent no. 1 (writ petitioner)

on 06.04.2019 along with an undertaking by the

respondent no. 1 (writ petitioner) to the effect that the

partnership agreement has been cancelled and the

power of attorney in favour of respondent no. 3 (Swati

Rai) has been revoked with the consent of said Swati

Rai.

On acceptance of ratification fees, as deposited by

respondent no. 1 (writ petitioner) a warning letter was

issued to him on 26.04.2019 to the effect that he shall

not change any constitution of distributorship without

prior approval of the corporation as the same is against

the policy guideline and in case of any further such

instance, the company/corporation would be

constrained to take suitable action against the

distributorship of respondent no.1 (writ petitioner) as

per policy in vogue.

(j) More than a year after, on 24.07.2020, second complaint

was received by the competent authority of the

appellants from respondent no. 3 (Swati Rai) to the

effect that she had not executed any deed of

cancellation of the partnership agreement and her

signature on the alleged cancellation deed is not of her.

On receipt of such complaint from respondent no. 3

(Swati Rai), respondent no. 1 (writ petitioner) was called

to the office of appellant no. 5 on 28.07.2020. The

impugned termination letter dated 19 th February, 2021

issued by appellant no. 5 is stated to be containing the

outcome of such meeting dated 28.07.2020.

(k) Nearly after six months on 20.11.2020 show-cause

notice in continuation of the first show-cause notice

dated 16.11.2018 was issued to the respondent no. 1

(writ petitioner).

Respondent no. 1 (writ petitioner) gave reply to such

notice on 08.12.2020 denying the assertion of

respondent no. 3 (Swati Rai) in her complaint dated

24.07.2020.

(l) Thereafter, notice of personal hearing was issued to

respondent no. 1 (writ petitioner) on 19.01.2021 which

the respondent no. 1 (writ petitioner) attended along

with his advocate. After going through the materials-on-

record, the impugned notice dated 19th February, 2021

terminating the LPG distributorship licence of

respondent no.1 (writ petitioner) was issued by

appellant no. 5.

3. The respondent no. 1 filed the writ petition on grounds thus:-

(i) The order of termination of his LPG distributorship

license is illegal and arbitrary and suffers from non-

application of mind by the competent authority.

(ii) The impugned order of termination of license is based on

no evidence and the grounds of termination of licence

that he (respondent no.1) had filed before the competent

authority of the oil company a forged deed of

cancellation of partnership firm and that before the

competent authority he had accepted the position that

the signature of Swati Rai appearing on the deed of

cancellation of partnership firm is not of Swati Rai

(respondent no. 3) are totally fallacious.

(iii) Without expert opinion the competent authority of the

appellants has reached a wrong conclusion to the effect

that the deed of cancellation submitted by him is a

forged document.

(iv) The violation committed by the writ petitioner (present

respondent no.1) having been condoned and the

ratification fees having been accepted, termination of his

distributorship licence amounts to double punishment.

(v) The principle of natural justice has not been complied

with before passing the impugned termination order

dated 19.02.2021.

4. The present appellants being the opposite parties before the Hon'ble Single

Judge disputed the assertions made by the writ petitioner and submitted that in

view of existence of arbitration clause in the agreement between the parties for

referral of the matter to the arbitrator, the writ petition is not maintainable.

Further adequate opportunity of hearing has been given to the writ petitioner and

there has been no violation of the principle of natural justice; the ratification fees

though accepted from the appellant, the agreement between the parties being

determinable one under Clause 28 of the agreement, there is no bar to determine

the agreement and cancel the distributor licence of the petitioner when it is found

that there has been contravention of any clause of the agreement by the petitioner.

5. Hon'ble Single Judge in the impugned judgment addressed the following

issues :-

(1) Whether the writ petition as laid is maintainable in view

of existence of arbitration clause in the agreement

between the parties;

(2) Whether there has been a breach of the principle of

natural justice in view of the assertion of the petitioner

that hearing given to the petitioner was inadequate and

ineffective;

(3) Whether the petitioner having not challenged the order

of the appellate authority dated 10.06.2021, he is

competent to challenge the order of termination of his

distributorship licence dated 19.02.2021.

5.1. Hon'ble Single Judge relying mainly on Whirlpool Corporation Vs.

Registrar of Trade Marks, Mumbai & ors. [(1998) 8 SCC 1]; Radha Krishan

Industries Vs. State of Himachal Pradesh & ors. [(2021) 6 SCC 771]; Unitech

Limited Vs. Telengana State Industrial Infrastructure Corporation (TSIIC)

[2021 SCC OnLine SC 99] held that existence of an arbitration clause in the

agreement between the parties does not disentitle the High Court from resorting to

exercise of jurisdiction under Article 226 of the Constitution of India provided the

case falls within exceptions elucidated in the case of Whirlpool Corporation

supra.

5.2. Relying on the case of Sarvepalli Ramaiah & ors. Vs. District Collector,

Chittoor District & ors. [(2019) 4 SCC 500] and Rajesh Kumar & ors. Vs. Dy.

CIT & ors. [(2007) 2 SCC 181] Hon'ble Single Judge held that the decision

making authority in the case being the appellant no. 5 himself in whose eyes

interest of the appellants were of paramount importance; there being inadequate

and ineffective opportunity of hearing afforded to the petitioner and the impugned

order dated 19.02.2021 having the potency of giving rise to significant civil

consequences, there has been gross violation of the principle of natural justice.

5.3. On the question of order of appellate authority not being impugned before

the writ court, Hon'ble Single Judge held that petitioner was required to challenge

order of the appellate authority but the appellate authority having dismissed the

appeal by holding that the appeal filed by the petitioner is not maintainable and by

further recording that it had not entered into the merit of the case, there was no

need for the petitioner to challenge the appellate order in the writ.

6. Mr. Jisnu Saha, learned Senior Counsel appearing for the appellants with

his usual zest, fairness, insight to the facts and erudition contends that though he

is not agreeable on law with the finding of Hon'ble Single Judge on the question of

maintainability of the writ petition under Article 226 of the Constitution of India,

when there is alternative remedy, he, for the purpose of this appeal does not

impugn such finding. However, some justifications have been given along with

citations against such finding in the written note of arguments submitted later on

(which we do not want to address as those were not placed before us in course of

hearing).

Similarly, Mr. Saha, learned Senior Counsel appearing for the appellants

does not want to impugn the finding of the Hon'ble Single Judge on the question of

petitioner (respondent no.1) not challenging the appellate order in the writ petition.

Mr. Saha, learned Senior Counsel appearing for the appellants with all

vehemence at his command but with utmost humility impugnes the finding of

Hon'ble Single Judge so far as non-compliance of the principle of natural justice is

concerned.

7. Per contra, Mr. Bhattacharyya, learned Counsel appearing for the

respondent no. 1 oppugns the contention raised by Mr. Saha, learned Senior

Counsel appearing for the appellants and takes us through the records of the case

to show us as to how the second complaint by respondent no. 3 (Swati Rai) has

come to be filed and he also questions the action of the appellants in unnecessary

meddling in the private dispute between respondent no. 1 and respondent no. 3,

though ratification fees has already been accepted by competent authority of the

appellants along with undertaking filed by respondent no. 1 and the law

department of the appellants have okayed the entire process by giving the green

signal to proceed ahead.

8. We shall deal with the questions and submissions raised by learned

Counsels for the parties at relevant stage. But before proceeding further we would

like to bring on record in our judgement, the facts which is the subject matter of

affidavit filed by one Kalpana Misra, an officer of the appellants in obedience to

order dated 04.03.2022 passed by a co-ordinate Bench in this appeal.

8.1. Kalpana Misra, on the relevant date of filing of the captioned affidavit, was

working as Manager (LPG-Sales), Kolkata 2 LSA. The gist of the affidavit filed by

her runs as follows:

i) In reply to show-cause notice dated 16.10.2018,

respondent no.1 (writ petitioner) prayed for condonation of

the action in entering into partnership with respondent

no. 3, Swati Rai.

ii) The action of the respondent no.1 (writ petitioner) was

condoned in accordance with "guidelines for

reconstitution, 2018" ('2018 guidelines' for short) restoring

status qua ante as it was prior to partnership with

respondent no.3, Swati Rai.

iii) Respondent no.1 (writ petitioner) along with required

ratification fees also gave an undertaking in consonance

with clause 4.5.1 of 2018 guidelines. The undertaking

given by respondent no. 1 (writ petitioner) reads thus :

"I/we undertake to take full responsibility for

our actions in the past and verify that what has

been stated above is true and correct to the best

of my knowledge and nothing material has been

concealed therefrom. If any

information/declaration given by me in this

affidavit shall be found to be untrue or incorrect

or false, Indian Oil Corporation Ltd. would be

within its rights to take suitable action as

deemed fit including termination and that I

would have no claim, whatsoever against Indian

Oil Corporation Ltd. (as applicable) for such

termination".

iv) The requirement of the aforesaid undertaking in the

form prescribed in '2018 guidelines' was to enable the

appellant oil company to verify the declaration made by

the respondent no.1 (writ petitioner).

v) On 20.12.2019, the appellant oil company sought

opinion of the law section of the corporation regarding the

documents received from respondent no.1 (writ petitioner).

vi) The Manager (Law) on 08.01.2020 opined in favour of

dissolution of the partnership but recommended

solicitation of affirmation from the parties who have signed

the cancellation deed i.e. partnership cancellation deed.

vii) On 18.02.2020, the Chief General Manager (LPG)

wrote to the General Manager (Vigilance) stating that the

complaint filed by Swati Rai (respondent no.3) be treated

as closed.

viii) After about 4 (four) months on 29.06.2020 the

Vigilance Department of the appellant oil company wrote

to the Executive Director and state-head of the

Corporation that it would be appropriate to suitably

intimate Swati Rai, respondent no. 3 to confirm the

authenticity of the deed of cancellation of partnership as

submitted by respondent no.1 (writ petitioner).

ix) In this context, Kalpana Misra is stated to have been

authorised to visit the residence of Swati Rai, respondent

no.3 who on questioning, denied to have signed any deed

of cancellation. Thereafter, she (Swati Rai) made further

complaint to the same effect on 24.07.2020.

After the second complaint dated 24.07.2020 submitted by Swati Rai

(respondent no.3) further show-cause notice in continuation of the earlier show-

cause notice was issued to respondent no.1 (writ petitioner), enquiry was held

which according to the appellants was held on due observance of the principle of

natural justice and the impugned letter of termination was issued against the

appellant no.1 (writ petitioner) vide annexure P-12.

9. The grounds of termination of LPG distributorship of the respondent no.1

(writ petitioner) are violation of Clause 21, Clause 23(c)(i). For the aforesaid

violation, the LPG distributorship of respondent no.1 (writ petitioner) was

terminated in consonance with Clause 27(a) of the agreement.

9.1. Clause 21 of the agreement reads thus:

"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 this 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 howsoever

will not be permitted without the previous written

approval of the Corporation notwithstanding that the

Corporation may have dealings with such

reconstituted firm or impliedly waived or condoned the

breach or default mentioned hereinabove by the

Distributor. In the event of the death of any of the

partners, the Distributor shall immediately inform the

Corporation giving the necessary particulars of the

heirs and legal representatives of the deceased

partner and it shall be the option of the Corporation

either to continue the distributorship with the said firm

or to have a fresh agreement of distributorship with

any reconstituted firm or to terminate the

distributorship agreement and the decision of the

Corporation in that behalf shall be final and binding on

all the parties concerned. No claim on premature

termination for compensation or otherwise will be

made or sustainable against the Corporation on

account of such termination."

This Clause bars any LPG distributor from changing the constitution of the

distributorship.

9.2. Clause 23(c)(i) of the agreement reads thus:

"Except with the previous written consent of the

Corporation:-

(i) The Distributor shall not enter into any agreement,

contract or understanding whereby the operations of

the Distributor hereunder 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."

This Clause also is to the same effect and casts responsibility on the

distributor not to enter into any agreement, contract or understanding whereby

the operations of the distributor under the agreement are or may be

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

9.3. Clause 27(a) is the general power of the corporation to determine the

agreement and terminate the LPG distributorship which has been invoked in the

present case to terminate the LPG distributorship of respondent no.1 (writ

petitioner).

10. Mr. Jishnu Saha, learned senior Counsel appearing for the appellant relying

on the case of Nand Kishore Prasad Vs. State of Bihar and Ors. [(1978) 3 SCC

366] (paras 19, 20, 21, 24, 25, 27); H.B. Gandhi Vs. M/s Gopi Nath & Sons &

Ors. [1992 Supp (2) SCC 312] (paras 8 and 9); West Bengal Central School

Service Commission & Ors. Vs. Abdul Halim & Ors. [2019 (18) SCC 39] (paras

27 to 32); Deputy General Manager (Appellate Authority) & Ors. Vs. Ajai

Kumar Srivastava [2021 (2) SCC 612] (paras 24 to 28), submits that the writ

court cannot find fault with the decision arrived at by the authority concerned but

if there is any fault in the decision making process, then the writ court shall have

scope for interference.

It is further submitted by Mr. Saha, learned senior Counsel appearing for

the appellant that upon each complaint being made by Swati Rai (respondent

no.3), the respondent no.1 (writ petitioner) was afforded full and effective

opportunity of showing cause; he was also afforded the opportunity of face to face

meeting with Swati Rai (respondent no.3); he was also afforded personal hearing

which he attended along with his Advocate, Mr. Acharya. In course of the face to

face meeting with Swati Rai (respondent no.3), the respondent no.1 (writ

petitioner) did not controvert Swati Rai's assertion to the effect that she had not

executed any deed of cancellation or any deed of revocation of partnership and she

has not signed any deed. It is further submitted by Mr. Saha, learned senior

Counsel appearing for the appellant that despite proper and effective opportunity

no evidence was produced by respondent no.1 (writ petitioner) to demonstrate that

signature in the deed of cancellation is that of Swati Rai. In the circumstances, it

is humbly submitted by Mr. Saha, learned senior Counsel appearing for the

appellant that neither the decision to terminate the distributorship of the

respondent/writ petitioner nor the decision making process leading to the

termination of the same was an error vulnerable to judicial review.

We have already reproduced the submissions made by Mr. Bhattacharyya,

learned Counsel appearing for the respondent no.1 (writ petitioner) in paragraph 7

supra and we do not want any further duplication.

11. In Commissioner of Police, Bombay Vs. Gordhandas Bhanji (AIR 1952

SC 16), Hon'ble Justice Vivian Bose speaking for the Three Judge Bench in

paragraph 9 of the Judgement in His Lordship's unimitable words held thus:

"An attempt was made by referring to the

Commissioner's affidavit to show that this was really

an order of cancellation made by him and that the

order was his order and not that of Government. We

are clear that public orders, publicly made, in

exercise of a statutory authority cannot be

construed in the light of explanations

subsequently given by the officer making the

order of what he meant, or of what was in his

mind, or what he intended to do. Public orders

made by public authorities are meant to have public

effect and are intended to affect the actings and

conduct of those to whom they are addressed and

must be construed objectively with reference to the

language used in the order itself."

(Emphasis supplied by us)

12. Aforesaid dictum of Hon'ble Supreme Court still holds the field. We are,

therefore, compelled to eschew the explanation and erudite submissions made on

behalf of the appellant and shall look at the impugned order vide annexure P-12 to

find out in what way principle of natural justice has been complied with by the

authority concerned and whether the process of decision making by the competent

authority suffers from any vice or vulnerability. From annexure P-12 it is found

that first complaint from Swati Rai, respondent no.3, was received by the appellant

oil company on 23.04.2018. In the said complaint Swati Rai had alleged that she

has provided financial assistance to the tune of Rs.50 lakhs to the present

respondent no.1 (writ petitioner) in lieu of which, he (writ petitioner) had executed

notarised deed of partnership dated 09.11.2016 and registered general power of

attorney dated 09.11.2016.

12.1. On the basis of the aforesaid complaint Swati Rai (respondent no.3) and

respondent no.1 (writ petitioner) were called to Kolkata Area Office. On 22.05.2018

respondent no.1 (writ petitioner) admitted everything and on the basis of '2018

guidelines' unauthorised act of respondent no.1 (writ petitioner) was condoned on

payment of requisite ratification fees. Respondent no.1 also submitted an

undertaking as extracted supra.

12.2. It is further found from annexure P-12 that after about two years on

24.07.2020 another complaint was lodged by Swati Rai for which a face to face

meeting in between Swati Rai (respondent no.3) and present respondent no.1 (writ

petitioner) was organised on 28.07.2020 at Area Office Kolkata. After the said

meeting continuation show-cause notice dated 20.11.2020 was issued to

respondent no.1 (writ petitioner) to which he (writ petitioner) replied on

08.12.2020. On the basis of the aforesaid meeting and reply sent by respondent

no.1 (writ petitioner) the authority in annexure P-12 came to the following finding :

"From the meeting and the reply sent by you, it

transpired that no cancellation deed/dissolution of

the partnership agreement dated 9/11/2016 has

been signed by Ms Swati Rai and a forged dissolution

cancellation deed has been submitted by you for

condoning the past mistakes. Further, Smt. Swati

Rai, vide letter dated 15.09.2020 has stated that her

signature has been forged and confirmed that she

has not signed any Deed of Cancellation and/or Deed

of Dissolution relating to Deed of Partnership dated

09.11.2016 entered into between her and yourself

relating to M/s Prayojani."

12.3. After coming to such finding the competent authority afforded another

opportunity to the respondent no.1 (writ petitioner) to prove his case before the

personal hearing officer and in this regard letter dated 19.01.2021 was issued to

respondent no.1 (writ petitioner). The meeting was held at 3 p.m. through V.C. on

09.02.2021. Mr. Anupam Acharya, learned Advocate took part in the personal

hearing on behalf of respondent no.1 (writ petitioner). Thereafter what transpire in

the meeting and how the authority has come to the finding that is important and

for ready reference we feel persuaded to extract the material of annexure P-12

herein below :

                  "Your    advocate    Shri      Anupam   Acharya    made    the

                  following submissions:-

                  A.      As per his opinion, complainant Smt. Swati Rai

                  had     executed    the   dissolution   of   the   partnership

                  agreement dated 09.11.2016.

                  B.      The Registered Deed for revocation of POA vide

deed no- 344 of 2018 was executed on 06.07.2018 and

another deed of cancellation of partnership Agreement

was executed on 29.06.2018 and the same was

notarized on 07.07.2018. Allegation of Smt. Swati Rai

that the signature on this dissolution of partnership

deed was not her signature is baseless and without any

merit. Further, allegation of Smt. Swati that the

signature on the cancellation deed was not entered

upon by her and the same has been forged is not

accepted and the documents is valid one. However, the

representative of the distributor made the submission

that in the event there is any discrepancy in the

cancellation of the partnership agreement the same can

be ratified later on.

C. That the cancellation deed of partnership

agreement dated 09.11.2016 is an authentic document

since the same was executed and notarized before a

competent authority. Certificated by Notary public is

suffice to prove that the dissolution deed is in order.

D. He further stated that you have returned more

than the amount you received from the complainant

Smt. Swati Rai. Further condonation was done by IOCL

after you deposited Rs. 16 lakhs as condonation fees.

During the course of personal hearing, you were asked

whether you had attended the meeting held at Kolkata

Area Office in presence of Area Manager and Ms. Swati

Rai on 28.07.2020 where Smt. Swati Rai stated that she

has not made any cancellation agreement and that the

signature on the document was not her signature. Shri

Anupam Acharya on your behalf confirmed that you as

the proprietor of M/s Prayojani have attended the

meeting. In the personal hearing you stated that you do

not accept that the signature is not of Smt. Swati Rai as

stated by her in the meeting dated 28.07.2020.

However you have not raised any objection during

the meeting on 28.07.20. Mr Acharya, further, on

your behalf, stated that you do not have any further

submission or any other additional documents to prove

your case.

Based upon the above noted submission and available

documentary evidence, it is amply clear that you, as

the Proprietor of M/s Prayojani, have intentionally

mislead the Corporation by producing forged documents

which you failed to clarify and hence committed the

above mentioned acts which are detrimental to the

interests of the Corporation and is in violation of the

Distributorship Agreement dated 29.01.1990."

12.4. From the aforesaid materials which are there in the impugned order

(annexure P12), it is clear that the respondent no.1 (writ petitioner) did not object

on 28.07.2020 during face to face meeting the allegation/assertion of Swati Rai,

respondent no.3 and the reference "available documentary evidence" as mentioned

in the last paragraph quoted supra are nothing but two complaints of Swati Rai

(respondent no.3).

13. From the aforesaid materials-on-record, we fail to understand in what

manner there has been effective compliance of the principle of natural justice.

Before affording opportunity the authority has already pre-decided the issue and

in coming to the conclusion they have relied on the bald complaints made by Swati

Rai, respondent no.3 and alleged silence of respondent no.1 (writ petitioner) during

the face to face meeting between Swati Rai and him (writ petitioner) on

28.07.2020.

13.1. The second question, which hunt our ingenuity is the facts narrated in the

affidavit of Kalpana Misra. Kalpana Misra has specifically averred in her affidavit

that on verification of documents filed by the respondent no.1 the law department

of the oil company okayed the same. The Chief General Manager (LPG) also wrote

to the General Manager (Vigilance) stating that the complaint by Swati Rai

(respondent no.3) be treated as closed. When after due enquiry the first complaint

lodged by Swati Rai, respondent no.3 was closed in view of acceptance of

ratification fees etc. then visit of an officer of the oil company to the residence of

Swati Rai, respondent no.3, to confront her about the genuineness of the

documents and subsequent complaint by her on 24.07.2020 should not have been

given effect to inasmuch as it was a dispute between Swati Rai, respondent no.3

and respondent no.1 (writ petitioner). If Swati Rai had alleged fraud/forgery etc. it

was a personal injury sustained by her and she had remedy both under criminal

law and civil law. She had the opportunity to redress her grievance by taking to

appropriate recourse of law.

14. When complaint was made by Swati Rai, respondent no.3 it was the duty of

the appellant oil company to direct her to approach the proper forum for redressal

of her grievance inasmuch as the oil company has got no proper in house

mechanism to address the question of fraud committed on a stranger to the

company by one of the distributor who is a party to the agreement between the

appellant oil company and such distributor. Though Swati Rai was a party both in

the writ petition and the appeal, she did not opt to appear before this Court to put

forth her grievance. The appellant no.1 (writ petitioner) on the other hand has

provided details of cheques given to Swati Rai on different dates in his averments

in the writ petition. That goes uncontroverted by Swati Rai, respondent no.3. It

might have so happened that though a supposition, some cheques issued by

respondent no.1 (writ petitioner) might have bounced and in that event also Swati

Rai, respondent no.3 had the remedy under the provisions of Negotiable

Instruments Act. There is nothing on record however to that effect. It was not

incumbent on respondent no.1/writ petitioner to prove the negative that he has

not committed fraud on Swati Rai or thereby indirectly affected the appellant oil

company. In the fitness of things Swati Rai, could have approached the proper

Court to prove the affirmative by alleging that respondent no.1 (writ petitioner) has

committed fraud on her and consequently on the appellant oil company. The

assumption of misconceived jurisdiction by the appellant oil company to saddle

wrong onus on respondent no.1 (writ petitioner) is, in itself an anathema to the

salutary principle of natural justice. You cannot ask a person to do a thing which

he is not obliged under law to do.

15. The appellant oil company and respondent no.1 (writ petitioner) are in a

vertical agreement, the appellant oil company being an instrumentality of State

and respondent no.1 (writ petitioner) being an ordinary citizen. Their relationship

is to be governed by the terms of the agreement and not by fundamental rights as

per law appealable in India. But it is settled law that in a vertical contract, the

principal being in a dominant position is expected to act fairly in every sphere. The

narration of events in the affidavit of Kalpana Misra is telltale to the effect that

there is some gap somewhere which has not come on record. When law section of

the appellant company okayed the matter and the higher authorities of the oil

company opined to treat the complaint filed by Swati Rai, respondent no.3 as

closed, it was not known and not on record as to why again the matter was

brought to fore without any rhyme and reason that too by giving personal visit to

the house of Swati Rai, respondent no.3 without any notice to respondent no.1

(writ petitioner).

15.1. In such a matter the appellant oil company should have drawn the line

when to stop and what to do. The best course available to the oil company as

discussed supra was to direct Swati Rai, respondent no.3 to get her grievance

redressed in proper Court of law and return to them with the order of the Court.

Though respondent no.1 (writ petitioner) acted fairly and impleaded Swati Rai both

in the writ petition and in the appeal, she did not turn up to offer her version of

the story and that itself tells a lot about the intention she nurtures and about her

seriousness in redressing her grievance.

16. Notwithstanding our findings supra, let us assume for the sake of argument

that there has been due observance of the principle of natural justice. Even then is

it a matter of botheration of the appellant to step into the shoe of Swati Rai,

respondent no.3. Our answer is "No". Swati Rai, respondent no.3 having alleged to

have suffered a personal injury, it was open for her to fight it out in competent

Court of law. If she would have provided the appellant oil company order of a

competent Court to show that respondent no.1 (writ petitioner) has defrauded her,

then the oil company (appellant) was well within its power to take appropriate

action against respondent no.1 (writ petitioner) after issuing due notice of show

cause to him. Here Swati Rai, respondent no.3 has filed bald complaints without

any proof against the respondent no.1 (writ petitioner). Non-objection of

respondent no.1 (writ petitioner) to the allegation of Swati Rai, respondent no.3

during face to face meeting has misconceivedly been taken as an evidence against

respondent no.1 (writ petitioner). The notarial cancellation of partnership deed and

registered revocation of power of attorney, tendered by the respondent no.1 (writ

petitioner) has not at all been given due weightage in course of the enquiry.

17. We are, therefore, constrained to hold that the decision arrived at by the

appellant oil company vide annexure P-12 is a decision based on no evidence at

all. We are conscious of the fact that the competent authority of the appellant sans

judicial or quasi judicial training may not know whether to write an order following

inductive or deductive method. Such a lacunae is condonable. But any order

based on no evidence is certainly a glaring defect in the process of decision

making, which is amenable to judicial review.

18. In consequenti, we affirm the order passed by Hon'ble Single Judge and

direct the appellant oil company to issue LPG distributorship in favour of the

respondent no.1 (writ petitioner) within a period of 10 (ten) days hence.

19. Accordingly, the appeal is dismissed but without cost.

20. Pronounced in open Court on this day i.e. 11 th day of May, 2023.

21. Urgent Photostat certified copy of this Judgement, if applied for, be given to

the parties on completion of usual formalities.

I agree.

(Partha Sarathi Sen, J.) (Chitta Ranjan Dash, J.)