Kerala High Court
K.R Distribution vs The Assistant General Manager (Eb ... on 5 January, 2021
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
TUESDAY, THE 05TH DAY OF JANUARY 2021/15TH POUSHA, 1942
WP(C).No.26760 OF 2020(T)
PETITIONER:
K.R DISTRIBUTION,
REPRESENTED BY THE PROPRIETOR,
PRADEEP KUMAR K.R, S/O. RAMAKRISHNAN,
AGED 32 YEARS,
DOOR NO. 10/356, K.A BUILDINGS,
KUNNANKULAM ROAD, OTTUPARA,
VADAKKANCHERRY
BY ADV. SRI.S.SUJIN
RESPONDENTS:
1 THE ASSISTANT GENERAL MANAGER (EB AND MKTG)
OFFICE OF THE PRINCIPAL GENERAL MANAGER
TELECOMMUNICATION,
BSNL SANCHAR BHAVAN, KOVILAKATHUMPADAM P.O,
THIRUVAMBADI, THRISSUR DISTRICT, PIN 680 022
2 DEPUTY GENERAL MANAGER (S&M-CM)
OFFICE OF THE CHIEF GENERAL MANAGER
TELECOMMUNICATION, KERALA CIRCLE,
THIRUVANANTHAPURAM, PIN 695 033
3 BHARATH SANCHAR NIGAM LTD,
REGISTERED OFFICE, BHARATH SANCHAR BHAVAN,
HARISH CHANDRA MATHUR LANE, JANPATH ROAD,
NEW DELHI, PIN 110 001
R1-3 BY ADV. SRI.K.RAMAKUMAR (SR.)
R1-3 BY ADV. SMT.E.V.MOLY
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 05.01.2021, ALONG WITH WP(C).27132/2020(N), THE COURT
ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C) No.26760&27132/2020
:2 :
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
TUESDAY, THE 05TH DAY OF JANUARY 2021/15TH POUSHA, 1942
WP(C).No.27132 OF 2020(N)
PETITIONERS:
1 SUGAR N' SPICE COMMUNICATION,
ST.THOMAS CENTRE, SASTRI ROAD, KOTTAYAM,
REPRESENTED BY ITS PROPRIETOR SRI. TOM JOSE,
S/O.IYPE VALLAMATTOM HOUSE, PANDAPPILLY P.O.,
MUVATTUPZHA, ERNAKULAM DISTRICT-686 661
2 PULIMOOTTIL FOOD PRODUCTS,
NARAMMMUZHI P.O., PATHANAMTHITTA-689 711,
REPRESENTED BY ITS PROPRIETOR
JOSE P.GEORGE, S/O.KORAH
3 KEY SYSTEMS INDIA PVT.LTD.,
M.G ROAD, ERNAKULAM,
REPRESENTED BY ITS MANAGING DIRECTOR,
K.C.JOSEPH, S/O. CHACKO, ALAPPUZHA
4 APTECH COMPUTERS,
MEDICAL COLLEGE, THIRUVANANTHAPURAM,
REPRESENTED BY PROPRIETOR,
DILEEP.V.S., S/O. VARGHESE,
EDATHALA HOUSE, THIRUVALLA
5 SURESH CHACKO,
MULAMOOTTIL PEEDIKAYI, MUTTAM,
THUMPAMON, PATHANAMTHITTA-689 502
6 JANATHA COMMUNICATIONS,
MUVATTUPUZHA, REPRESENTED BY ITS PROPRIETOR,
C.K.RAGHU, S/O. LATE KUNJAN.C.K.,
KACHERITHAZHAM, MUVATTUPUZHA-686 661
BY SRI N.N SUGUNAPALAN (SR.)
BY ADV. SRI.S.SUJIN
WP(C) No.26760&27132/2020
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RESPONDENTS:
1 DEPUTY GENERAL MANAGER (S&M - CM)
BSNL, OFFICE OF THE CHIEF GENERAL MANAGER
TELE COMMUNICATIONS, KERAAL CIRCLE,
THIRUVANANTHAPURAM,PIN-695 033
2 THE GENERAL MANAGER (MARKETING)
BSNL, OFFICE OF THE CHIEF GENERAL MANAGER
TELE COMMUNICATIONS, KERALA CIRCLE,
THIRUVANANTHAPURAM,PIN-695 033
3 BHARATH SANCHAR NIGAM LTD,
REGISTERED OFFICE, BHARATH SANCHAR BHAVAN,
HARISH CHANDRA MATHUR LANE, JANPATH ROAD,
NEW DELHI,PIN-110 001
R1 BY ADV. SRI.K.RAMAKUMAR (SR.)
R1 BY ADV. SMT.E.V.MOLY
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 05.01.2021, ALONG WITH WP(C).26760/2020(T), THE COURT
ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C) No.26760&27132/2020
:4 :
JUDGMENT
~~~~~~~~~
Dated this the 5th day of January, 2021
[ WP(C).26760/2020 & WP(C).27132/2020 ]
Petitioners in these writ petitions, who are
Franchisees of the BSNL, are challenging the action of the
BSNL in inviting Expression of Interest for dealerships in their
respective areas.
2. The petitioner in W.P.(C) No.26760 of 2020 is a
Franchisee of BSNL. The petitioner states that the petitioner
was selected as Class-C Franchisee. The petitioner executed
agreement as Class-C Franchisee. When the petitioner
started the business, the petitioner could easily achieve the
targets fixed for Class-C Franchisees. However, the
respondents re-categorised the petitioner's territory as
Class-A. The petitioner's area of business is in a remote
place and the business target fixed for Class-A, is difficult to
WP(C) No.26760&27132/2020
achieve. However, the petitioner executed Ext.P2 agreement.
3. The petitioner contended that speed of network is
an important attraction for subscribers of telecom. There was
no 4G coverage in the petitioner's area. The petitioner
submitted Ext.P4 representation, which was not positively
responded to. In spite of the low network coverage in the area,
the petitioner achieved the quarterly targets except in the last
quarter of 2020.
4. The petitioner was issued with Ext.P6
communication from the 1st respondent informing that the
petitioner has failed to achieve the target and their average
achievement is 49.5% instead of 50%. Without any further
intimation, the 1st respondent issued Ext.P7 notice inviting
Expression of Interest (EOI) on 20.11.2020 for fresh EOI for
Vadakkancherry area allotted to the petitioner. It is the
petitioner's case that the BSNL Headquarters has issued
Ext.P8 general order to extend the existing Franchisees'
contractual period for one year more in view of the prevailing
Covid-19 pandemic. In the circumstances, the petitioner prays
WP(C) No.26760&27132/2020
to direct the respondents to permit the petitioner to continue
as Franchisee of BSNL for Vadakkencherry area in the light of
Ext.P8.
5. W.P.(C) No.27132 of 2020 has been filed by six
petitioners who are all Franchisees of the BSNL, for similar
relief. The petitioners stated that monthly sales targets are
communicated by the BSNL in the last week of the previous
quarter and failure to achieve the target will attract the
termination clause. In spite of adverse circumstances, the
petitioners achieved the target except in the lock down period
as evidenced by Ext.P3. While so, the petitioners were served
with the communications of the respondents to the effect that
their performance is below the benchmark. The petitioners
would submit that all the petitioners have achieved 50% marks
or above in the previous years and there was no difficulty to
get similar achievements during the current year also. The 1 st
respondent, who is an office bearer of the organisation of
Franchisees, submitted Ext.P7 representation to consider the
pandemic situation prevailing while assessing the
WP(C) No.26760&27132/2020
achievement of target.
6. The petitioners submit that under the EOI and the
agreements entered pursuant thereto, the respondents are
bound to inform the petitioners the performance of previous
years. This was not done. Even for termination of
Franchiseeship, one month notice is necessary. No notice
was issued to the petitioners. To the surprise and
predicament of the petitioners, the respondents issued Ext.P8
notification dated 25.11.2020 inviting EOI for franchiseeship in
the areas served by the petitioners. The petitioners therefore
challenged Exts.P8 to P11 and sought for a direction to the
respondents to permit the petitioners to continue as
Franchisees of BSNL in the light of Ext.P12 letter of the
DGM(Sales and Marketing)-CM which provided for extension
of agreement of all Franchisees, who were migrated for the
period of three years and whose agreements are to expire on
31.12. 2020 or thereafter.
7. The respondents resisted W.P.(C) No.26760 of
2020, filing reply statement. The respondents stated that
WP(C) No.26760&27132/2020
extension has to be considered as per para 'L' of the CM
Sales and Distribution Policy-2018 (S&D Policy-2018). It is
discretionary on the part of the Circle Head to decide whether
agreement is to be approved for extension or not. Such
extension can be granted only in the interest of the BSNL. The
BSNL Head Office has issued communication dated
17.11.2020 directing that extension of agreement may be
done only in accordance with para 'L' of S&D Policy-2018
subject to satisfactory performance in accordance with Clause
4.2 of Section 4 of the Policy.
8. The respondents stated that as per the revised
S&D Policy, the area served by the petitioner was re-classified
from Class-C to Class-A. The petitioner agreed to the terms
and conditions of the new policy and submitted a bank
guarantee of ₹3 lakhs. The petitioner executed a new
agreement also. There was no compulsion from the BSNL for
migrating from Class-C to Class-A. The business of the BSNL
in the petitioner's area became continuously below
benchmark. The petitioner was advised to improve the
WP(C) No.26760&27132/2020
business.
9. As per the S&D Policy-2018, Franchisees who
could not achieve even 50% of the pre-assigned target are
under-achievers. The petitioner was one of the lowest
performer in the year 2019-'20 in Kerala Circle. The previous
Franchisee in the area could achieve a revenue of around ₹1
Crore in almost all months during the years 2016-2017. The
petitioner's revenue has been only around ₹20-25 lakhs for
the two years. The petitioner was graded low based on their
performance in the year ending March, 2020. Covid-19 had
only minuscule impact on the business of the financial year.
10. Counter affidavit was filed by the respondents in
W.P.(C) No.27132 of 2020 also, resisting the writ petition.
The respondents stated that migration of the petitioners to
higher grades were as per the S&D Policy of the respondents.
The petitioners have accepted all the conditions in the S&D
Policy-2018 and executed agreements accordingly.
Therefore, the petitioners cannot claim any reliefs.
11. I have heard the learned Senior Counsel assisted
WP(C) No.26760&27132/2020
by the counsel for the petitioners and the learned Senior
Counsel assisted by the Standing Counsel appearing for the
respondents.
12. The argument of the petitioners that they were
forced to migrate to Class-A cannot be accepted. In the BSNL
S&D Policy revised in the year 2018, there was an option for
migration to higher classes. Accordingly, the petitioners were
reclassified. The reclassification was informed to the
petitioners. The petitioners accordingly provided bank
guarantee and executed new agreements. After providing
bank guarantee and after entering into new agreements, the
petitioners cannot be heard to contend that they were
upgraded unilaterally.
13. A perusal of Section 2D (Eligibility criteria) of the
Sales and Distribution Policy-2018 of the BSNL would show
that for Class-A Franchisees, the monthly SIM-top up average
sales in the last financial year should be more than 50,00,000.
The average weighted score of the petitioner in W.P.(C)
No.26760 of 2020 for the financial year 2019-'20 was only
WP(C) No.26760&27132/2020
49.5%. As regards the petitioners in W.P.(C) No.27132 of
2020, Ext.P4 communication would show that the weighted
score of every month of the first petitioner was below
benchmark of 50%. As regards the second petitioner, the SIM
achievement till 21.10.2020 is only 146 as against a target of
1259 which comes to 11.59% of the monthly target. Even
according to the petitioners, they have achieved 50% marks or
above only in the previous years. Therefore, the respondents
were justified in not extending the franchiseeship of the
petitioners.
14. The contention of the petitioners is that the
Covid-19 pandemic had affected their business. However, the
assessment of the business of the petitioners was made
based on the quarter ending March, 2020. Lock down
consequent to Covid-19 was declared only on 24.03.2020.
Therefore, impact of lock down would be only minimal,
confined to the month March, 2020 and it cannot have any
significant impact at all on the sales of previous months.
15. Clauses 8 and 9 of the Tri-party Rural
WP(C) No.26760&27132/2020
Distributorship Agreement would show that extension of
franchisees should be based on performance and will be on
year to year basis for a period of two years. The decision of
BSNL shall be final in regard to grant of extension. When
extension of an agreement is to be on mutuality, the
petitioners cannot insist that agreement should be extended
since they so desire.
16. In the case of the petitioner in W.P.(C) No.26760 of
2020, Ext.P6 communication would show that the weightage
achieved by the petitioner during the fourth quarter was 45.1
and the yearly average was 49.5. Ext.P7 produced in W.P.(C)
No.27132 of 2020 would show that the first petitioner could
achieve only 48.53% from the targeted revenue sales in the
month of March, 2020 in Kottayam area and 49.57% in
Changanassery area.
17. It is true that the Corporate Office of the BSNL has
issued a letter dated 17.11.2020 to Chief General Managers
of all Telecom Circles stating that extension of agreement of
all Franchisees, who were migrated for the period of three
WP(C) No.26760&27132/2020
years and whose agreements are going to expire on
31.12.2020, may be extended for one year. However, Ext.P8
itself makes it clear that it should be done as per the
provisions contained in S&D Policy-2018. The respondents
have acted only in accordance with the S&D Policy.
18. It is evident that the termination of the arrangement
between the petitioners and the BSNL is as a result of expiry
of tenure covered by the agreements/contracts concerned.
The petitioners cannot as of right claim that their tenure
should be extended. Extension of the period of existing
Franchisees is purely on the discretion of the respondents.
Admittedly, the respondents have refused to allow extension
based on the performance of the petitioners.
In the facts and circumstances of the case, no
interference is called for in the action of the BSNL in inviting
fresh Expressions of Interest. The writ petitions fail and they
are consequently dismissed.
Sd/-
N. NAGARESH, JUDGE
aks/12.01.2021
WP(C) No.26760&27132/2020
APPENDIX OF WP(C) 26760/2020
PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE EXPRESSION OF
INTEREST DATED 13-07-2017 ISSUED BY
THE 1ST RESPONDENT
EXHIBIT P2 TRUE COPY OF THE AGREEMENT DATED 01-
01-2018 BY THE ISSUED BY THE
PETITIOENR
EXHIBIT P3 TRUE COPY OF THE REPRESENTATION DATED
25-10-2018 SUBMITTED BY THE PETITIONER
BEFORE THE 1ST RESPONDENT
EXHIBIT P4 TRUE COPY OF THE REPRESENTATION DATED
07-11-2018 SUBMITTED BY THE PETITIONER
BEFORE THE 1ST RESPONDENT
EXHIBIT P5 COMPARATIVE TABLE SHOWING THE
DISTRIBUTION OF BTS
EXHIBIT P6 TRUE COPY OF THE COMMUNICATION DATED
06-05-2020 ISSUED BY THE 1ST
RESPONDENT
EXHIBIT P7 TRUE COPY OF THE NOTIFICATION DATED
20-11-2020 ISSUED BY THE 1ST
RESPONDENT INVITING EOI
EXHIBIT P8 TRUE COPY OF THE NOTIFICATION DATED
17-11-2020 ISSUED BY THE 1ST
RESPONDENT.
RESPONDENTS' EXHIBITS:
EXHIBIT R1(A) TRUE COPY OF THE SALES & DISTRIBUTION
POLICY 2018
EXHIBIT R1(B) BSNL HEAD OFFICE LETTER DATED
07.12.2020
EXHIBIT R1(C) BSNL CIRCLE OFFICE LETTER DATED
02.05.2020
WP(C) No.26760&27132/2020
APPENDIX OF WP(C) 27132/2020
PETITIONERS' EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE EXPRESSION OF
INTEREST DATED 13.07.2017 ISSUED BY
THE 1ST RESPONDENT
EXHIBIT P2 THE TRUE COPY OF THE AGREEMENT DATED
01.01.2018
EXHIBIT P3 THE TRUE COPY OF THE CERTIFICATE OF
APPRECIATION ISSUED TO THE 5TH
RESPONDENT BY BSNL
EXHIBIT P4 THE TRUE COPY OF THE COMMUNICATION
DATED 15.10.2020 ISSUED BY THE
PRINCIPAL GENERAL MANAGER, KOTTAYAM TO
THE 1ST PETITIONER
EXHIBIT P5 THE TRUE COPY OF NOTICE ISSUED TO THE
6TH PETITIONER DATED 03.11.2020 BY THE
ASSISTANT GENERAL MANAGER (EB &
MKTG),BSNL ERNAKULAM
EXHIBIT P6 THE TRUE COPY OF THE REPLY SUBMITTED
BY THE 6TH PETITIONER DATED 10.11.2020
EXHIBIT P7 THE TRUE COPY OF THE REPRESENTATION
DATED 17.11.2020 SUBMITTED BY THE 1ST
PETITIONER TO THE GENERAL MANAGER
(MARKETING) THIRUVANANTHAPURAM
EXHIBIT P8 THE TRUE COPY OF THE NOTIFICATION
DATED 25.11.2020 INVITING
EOI(EXPRESSION OF INTEREST) FOR
KOTTAYAM AND CHANGANASSERY
EXHIBIT P9 THE TRUE COPY OF THE NOTIFICATION
DATED 25.11.2020 INVITING
EOI(EXPRESSION OF INTEREST) FOR
PATHANAMTHITTA ND KONNI
WP(C) No.26760&27132/2020
EXHIBIT P10 THE TRUE COPY OF THE NOTIFICATION
DATED 25.11.2020 INVITING
EOI(EXPRESSION OF INTEREST) FOR M.G
ROAD AND MUVATTUPUZHA
EXHIBIT P11 THE TRUE COPY OF THE NOTIFICATION
DATED 25.11.2020 INVITING
EOI(EXPRESSION OF INTEREST) FOR
ATTINGAL AND MEDICAL COLLEGE
EXHIBIT P12 THE TRUE COPY OF THE COMMUNICATION
DATED 17.11.2020 ISSUED BY THE DEPUTY
GENERAL MANAGER (SALES AND MARKETING)
OF THE 2ND RESPONDENT
EXHIBIT P13 TRUE COPY OF THE DATED 28.3.2019
ISSUED BY THE DIVISIONAL ENGINEER
PROJECT VIJAY ERANAKULAM
EXHIBIT P14 TRUE COPY OF THE ORDER DATED 4/12/2020
ISSUED BY THE SALES HEAD, PROJECT
VIJAY, BSNL ERNAKULAM
EXHIBIT P15 TRUE COPY OF THE SHOW CAUSE NOTICE
DATED 3/11/2020 ISSUED BY THE OFFICE
OF THE PRINCIPAL GENERAL MANAGER, BSNL
KOCHI
EXHIBIT P16 TRUE COPY OF THE LIST OF 10 LOWEST
PERFORMERS DATED 2/5/2020 PUBLISHED BY
THE OFFICE OF THE CHIEF GENERAL
MANAGER, TELECOMMUNICATIONS
THIRUVANANTHAPURAM
RESPONDENTS' EXHIBITS:
EXHIBIT R1(A) TRUE COPY OF THE LETTER NO 27-
4/2016/S&M-CM/45 DATED 10.11.2017.
EXHIBIT R1(B) TRUE COPY OF PAGE 1 AND 2 OF AGREEMENT
DATED 20.03.2018 AND 28.3.2018 OF
PETITIONER No.2 AND 5.
EXHIBIT R1(C) COPY OF JUDGMENT DATED 03.02.2014 IN
WPC 107/2014 AND CONNECTED MATTERS.
SR
