M/S. Cls Limited & Anr vs Union Of India & Ors
2023 Latest Caselaw 6920 Cal

                    IN THE HIGH COURT AT CALCUTTA
                  CONSTITUTIONAL WRIT JURISDICTION
                          APPELLATE SIDE


The Hon'ble JUSTICE BIBEK CHAUDHURI


                             WPA 21507 of 2023

                        M/s. CLS Limited & Anr.
                                  -Vs-
                         Union of India & Ors.

      For the Petitioners:        Mr. Debabrata Saha Roy,
                                  Mr. Neil Basu,
                                  Mr. Rahul Kumar Singh,
                                  Mr. Sankha Biswas.

      For the Respondent No.2 to 7:

Mr. Biswanath Chatterjee, Mr. Sobhan Pathak, Mr. Soham Krishna Chatterjee.

Heard on: 08 September, 2023.

Judgment on: 10 October, 2023.

BIBEK CHAUDHURI, J. : -

1. M/s CLS Limited a private company registered under the

Companies Act, 1956 carries on the business of distributorship of

Hindustan Petroleum Corporation Limited (HPCL) in respect of sale and

distribution of domestic LPG cylinders under the name of its business

concerned M/s Anand HP Gas Service CLS Limited. The operation of the

business of the said Gas Service is limited to an area in the district of

Howrah. It is the case of the petitioners that for the purpose of

distributorship business the petitioners constructed a godown having

12,000 KG capacity as per the norms and guidelines laid down by the

respondent No.2 Company. The petitioners also obtained a fire license

and other licenses necessary for carrying on the said business. The

godown with storage articles has been insured by the National Insurance

Company in due compliance with Clause 20 of the Dealership Agreement.

The petitioners further contend that after entering into the dealership

agreement with HPCL, the petitioners are bound by the terms and

conditions mentioned in the Marketing Discipline Guidelines for LPG

Distributorship which is published by the Oil Marketing Companies as

per the Marketing Discipline Guidelines. The LPG Distributors are

required to place timely and sufficient indents for filled cylinders and at

the bottling plants of the Oil Marketing Companies to ensure timely

delivery of filled cylinders to the customers. Therefore the companies are

obliged to deliver packed LPG cylinders to the distributors according to

their requirement. The grievance of the petitioners is that the respondent

No.2 Company has been acting contrary to these norms and unilaterally

dumping its products upon the petitioner without any order being placed

by it. Furthermore, the company compels the petitioner to receive

commercial cylinders and store them in their godown although, the

distributorship was granted to the petitioner for domestic cylinders. Since

the petitioner's godown has 12,000 KG or 12 Metric tons capacity the

petitioner is suffering from a space crunch to keep the cylinders supplied

by the respondent No.2 in excess of the petitioner's capacity. The

petitioner is compelled to keep commercial cylinders in his godown in

excess of its capacity and it is the reasonable apprehension of the

petitioner that the Fire license and Trade license may be cancelled if any

inspection is held by the said authorities of the government for storing

cylinders in excess of the capacity of the godown. Therefore the petitioner

was compelled to make representation before the respondent on 7th June,

2023 when the HPCL gave a specific target to distribute the cylinders both

domestic and commercial, in most arbitrary and unjust manner. In spite

of receipt of such representation the respondent No.2 did not stop their

unilateral deliveries and continued to dump commercial cylinders to

compel the petitioner to sell the same at a higher price than what is

available in the open market.

2. On the above fact, the petitioner has prayed for the following reliefs:

a) Dispense with Rule 26 of the Writ Rules framed under Article 226 of the Constitution of India for this Hon'ble Court;

b) A Writ of and/or in the nature of Mandamus do issue directing the respondents, their men, agents, servants, and assignees specifically the Respondents No. 2 to 7 not to unilaterally alter the indent of your Petitioners and not to deliver the commercial cylinders to the godown of your Petitioner without any prior order being placed for those commercial cylinders by your petitioners;

c) A Writ of and/or in the nature of Mandamus do issue directing the respondents, their men, agents, servants, and assignees specifically the Respondents No. 2 to 7 to take back the commercial cylinders already delivered to the godown of your Petitioner for reducing the stock of

your Petitioner's godown below the permissible limit of 12000 Kg or 12 MT;

d) A Writ of and/or in the nature of Prohibition do issue prohibiting the respondents, their men, agents, servants, and assignees specifically the Respondents No. 2 to 7 from unilaterally altering the indent of your Petitioners and from delivering the commercial cylinders to the godown of your Petitioner without any prior order being commercial placed for those commercial cylinders for by your Petitioners;

e) A Writ of an/or in the nature of mandamus do issue directing the respondents, their men, agents, servants, assignees specifically the Respondents No. 2 to 7 not to take any coercive step against your Petitioner;

f) A Writ of and/or in the nature of Certiorari do issue directing the respondents and/or their men/ agents/ servants to transmit all records relating to and/or forming the basis of unilaterally altering the indent of your Petitioner and unilaterally delivering the commercial cylinders of 19 Kg and 5 Kg to the godown of your Petitioner in absence of any Order being placed for such cylinders and to certify the same and on being so certified quash the same so that conscionable justice may be rendered;

g) Rule NISI in terms of prayers (b) to (f) as above and to make the Rule absolute if no cause and/or insufficient is shown in reply cause thereto;

h) An Order do issue directing the Respondent officials not to unilaterally alter the indent of your Petitioners and not to deliver the commercial cylinders to the godown of your Petitioner without any prior order being placed for those

commercial cylinders by your Petitioners during the pendency of this Writ Petition;

i) An Order do issue directing the Respondent officials to take back the commercial cylinders already delivered to the godown of your Petitioner for reducing the stock of your Petitioner's godown below the permissible limit of 12000 Kg or 12 MT;

j) An Order do issue directing the respondents and/or their men, agents, servants, assignees not to terminate the LOA and Dealership Agreement issued to the Petitioner till disposal of this Writ Petition;

k) Ad-interim order in terms of prayers (h), (i) and (j) above;

l) Pass such other or further order or orders and/or direction or directions as Your Lordships would deem fit and proper

Since the respondent No.2 to 7 entered appearance through their

learned Advocate, the instant writ petition was heard on merit and this

Court proceeds to deliver the following judgment.

3. It is submitted by Mr. Saha Roy, learned Advocate for the petitioner

that Clause 1.6 of the Marketing Discipline Guidelines 2022 states-

i) LPG distributor should ensure availability of sufficient filled cylinders of correct quantity and quality for timely delivery of filled cylinder to the customers by placing timely and sufficient indents for filled cylinders at Bottling Plants of OMCs. Normally filled cylinders' stock equivalent to two days of average daily off-take and turnaround time of the truck from the supply point must be available and an indent available at supply point should be the basis for placing the next indent by distributor.

ii) LPG distributor should provide adequate delivery infrastructure form making home delivery of LPG cylinders commensurate to the average daily refill sales and also to take care of breakdowns/absenteeism. In case of backlog situation, additional delivery infrastructure as per requirement is to be provided.

4. The above-mentioned two guidelines normally suggest that the Oil

Company will deliver LPG cylinders as per the indents submitted by the

distributor. In the instant case the Oil Company has been supplying not

only the domestic but also commercial cylinders to the petitioner for

distribution. Further, the grievance of the petitioner is that the Marketing

Company is not making the supply of the cylinders as per the indents.

On the contrary, they unilaterally supplied more cylinders than required

for more requirement of cylinders for distribution to the company. Thus,

the petitioner company is forced not only to keep but to distribute the

cylinders although the customers did not have the requirement. It is

submitted by Mr. Saha Roy that although the distributorship of the

petitioner is the outcome of a contract between the HPCL and the

petitioners, since the contract has been made by the Oil Company

Corporation, which is owned by the State, he arbitrary, unjust and

malafide act of the Corporation is amenable to writ jurisdiction. As per the

contract the petitioner is under an obligation to sell domestic LPG

cylinders but he was forced to receive and sell commercial cylinders.

However in the case of domestic cylinders the Oil Company is not

following guidelines of Marketing Guidelines framed by the respondent

themselves. Therefore the petitioners are entitled to get relief in the

instant writ petition as prayed for by it.

5. Mr. Biswanath Chatterjee, learned Advocate on behalf of the

respondent, on the other hand he submits that the dispute between the

parties arises out of contract. It is a contractual dispute absolutely private

in nature and therefore, there is no semblance of public law involvement

in the dispute. The grievance of the petitioners is that the respondents are

delivering commercial cylinders to the petitioner for sale. It is pointed out

by Mr. Chatterjee that the contract was made between the petitioner and

the HPCL appointing the petitioner as dealer of the corporation " on

principal to principal basis, for sale of the Corporation's Liquefied

Petroleum gas (LPG) known as 'H.P gas' in cylinders only for household

consumers and commercial consumers like hotels, canteens, hospitals

etc. but not for industrial use nor for any industrial use nor for any

industrial consumer in the territory or distribution area of operation at

Howrah Municipality or........". The contract also states that the

corporation is at liberty to change the trading area of operation. Thus the

petitioner was under obligation to sell both domestic and commercial

cylinders. The petitioner cannot say that he will only sell domestic

cylinders and not the commercial cylinders.

6. Secondly, it is submitted by Mr. Chatterjee, learned Advocate for

the respondents that the instant writ petition is not maintainable in view

of the fact that the writ petition it does not contents any allegation of

violation of Fundamental Right of the petitioner. It is also not alleged that

the principle of natural justice has been violated or that the delivery of

commercial gas cylinders for sale to the petitioner/distributor by the Oil

Company is wholly without jurisdiction.

7. Thirdly, it is submitted by Mr. Chatterjee that the instant writ

petition is not maintainable in view of the fact that the agreement between

the petitioner and HPCL contains an arbitration clause and in case of any

dispute between the petitioner and HPCL, either of the parties can refer

the dispute to the distributor of arbitration. Thus when an alternative

efficacious remedy is available equitable relief by issuing a prerogative

writ is not maintainable.

8. In reply to the submission made by Mr. Biswanath Chatterjee,

learned Advocate for the respondents, Mr. Saha Roy refers to a decision of

this Court in M/s Bimala Gas Service & Anr. vs. Indian Oil

Corporation reported in 2018 SCC OnLine Cal 7352 in paragraph 34 of

the aforesaid report a Co-ordinate Bench of this Court held that the

availability of alternative remedy is not an absolute bar to entertain a writ

petition. When the livelihood of the petitioners has been taken away

relying on an irrelevant and non-existence clause, Fundamental Right of

the petitioners to carry on trade and earn their living has been illegally

infringed by the respondent authorities. Therefore, the Bench held that

the order of termination of distributorship of the petitioners is not tenable

in the eye of the law. While coming to such a decision, the Co-ordinate

Bench relied on the decision of the Apex Court in Harbanslal Sahnia &

Anr. vs. Indian Oil Corporation Ltd. & Ors. reported in 2003 (2)SCC

107. Thus the impugned order of termination of the distributorship

license of the petitioners was set aside and the respondent authorities

were directed to restore the distributorship license of the petitioners.

9. The Indian Oil Corporation preferred an appeal against the

aforesaid judgment which was registered as MAT 1493 of 2018. The

Division Bench, placing reliance on the decision in Harbanslal (supra)

and Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai &

Ors. reported in (1998) 8 SCC 1 dismissing the said appeal. The Oil

Corporation preferred a Special Leave Petition being SLP (Civil) Diary

No.31111/2019 before the Hon'ble Supreme Court which was dismissed.

10. Thus, it is submitted by Mr. Saha Roy that, if a distributor is forced

to distribute the product of the corporation over and above the indent

submitted by the distributor, the act of the corporation is not only an

unfair trade practice but is also violates the petitioners Right to Business

provided under Article 19(1)(g) of the Constitution of India. So the writ

petition is maintainable and it requires to be heard on merit.

11. Considering the law on the subject of the precedents not only by the

Hon'ble Supreme Court, the law on the subject has been succulently laid

down in Radha Krishan Industries vs. State of Himachal Pradesh &

Ors. reported in (2021) 6 SCC 771. Paragraph 27 of the aforesaid

judgment describes the principles of law in the following words:-

"27.1. The power under Article 226 of the Constitution to issue writs can be exercised not only for the enforcement of fundamental rights, but for any other purpose as well.

27.2. The High Court has the discretion not to entertain a writ petition. One of the restrictions placed on the power of the High Court is where an effective alternate remedy is available to the aggrieved person.

27.3. Exceptions to the rule of alternate remedy arise where :

(a) the writ petition has been filed for the enforcement of a fundamental right protected by Part III of the Constitution; (b) there has been a violation of the principles of natural justice;

(c) the order or proceedings are wholly without jurisdiction; or

(d) the vires of a legislation is challenged.

27.4. An alternate remedy by itself does not divest the High Court of its powers under Article 226 of the Constitution in an appropriate case though ordinarily, a writ petition should not be entertained when an efficacious alternate remedy is provided by law.

27.5. When a right is created by a statute, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution. This rule of exhaustion of statutory remedies is a rule of policy, convenience and discretion.

27.6. In cases where there are disputed questions of fact, the High Court may decide to decline jurisdiction in a writ petition. However, if the High Court is objectively of the view that the nature of the controversy requires the exercise of its writ jurisdiction, such a view would not readily be interfered with."

12. In Uttar Pradesh Power Transmission Corporation Ltd. & Anr. vs

CG Power Industrial Solutions Ltd. & Anr. reported in (2021) 6 SCC 15

the Hon'ble Supreme Court held in paragraph 67:-

"67. It is well settled that availability of an alternative remedy does not prohibit the High Court from entertaining a writ petition in an appropriate case. The High Court may entertain a writ petition, notwithstanding the availability of an

alternative remedy, particularly: (i) where the writ petition seeks enforcement of a fundamental right; (ii) where there is failure of principles of natural justice or (iii) where the impugned orders or proceedings are wholly without jurisdiction or (iv) the vires of an Act is under challenge. Reference may be made to Whirlpool Corpn. v. Registrar of Trade Marks Whirlpool Corpn. vs. Registrar of Trade Marks, (1998) 8 SCC 1 : AIR 1999 SC 22] and Pimpri Chinchwad Municipal Corpn. v. Gayatri Construction Co., cited on behalf of Respondent 1."

13. I have carefully considered the facts and circumstances of the

instant case and also the decisions relied on by the learned Counsels for

the petitioners and the respondents.

14. In Bimala Gas (supra), the distributorship was terminated by the

Oil Corporation. This Court on considering the particular facts and

circumstances as well as on due consideration of the decisions came to

the conclusion that an order of termination of distributorship on some

unknown non-existence ground amounts to the denial of livelihood thus,

constituting infringement of basic Fundamental Right of life and trade

and commerce and therefore, order of termination was set aside.

15. In the instant case, the respondents did not take any such steps

against the petitioner. It is the allegation of the petitioner that the

respondents are forcing the petitioner to sell commercial gas cylinders to

sell but the terms and contract was that the petitioner is under obligation

to sell domestic cylinders. The dispute between the parties is absolutely

private in nature and it can be settled through arbitration. In the instant

case the petitioner has failed to establish a violation of any Fundamental

Right or principles of natural justice. The allegation of imposition of the

condition by the respondents upon the petitioner to sell commercial gas

cylinders is without jurisdiction.

16. The decision of U.P Power Transmission Corporation Ltd. & Anr. is

also not applicable in the instant case because of fact that it is

ascertained that the petitioner before the Hon'ble Supreme Court did not

oppose the writ petition on the ground of the existence of an arbitration

clause there is whisper of any arbitration agreement in the counter

affidavit filed by the UPPTCL to the writ petition in the High Court. On the

above fact, the Hon'ble Supreme Court entertained the Special Leave

Petition filed by the petitioner.

17. In the instant case, maintainability of the writ petition has also

been challenged on the ground of the existence of an arbitration clause.

18. For the reasons stated above, I do not find any merit in the instant

writ petition.

19. Accordingly, the writ petition is dismissed for being not

maintainable.

(Bibek Chaudhuri, J.)