Kerala High Court
M/S. Divine Gas Enterprises vs Government Of India on 8 January, 2021
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
FRIDAY, THE 08TH DAY OF JANUARY 2021/18TH POUSHA, 1942
WP(C).No.11144 OF 2020(P)
PETITIONER:
M/S. DIVINE GAS ENTERPRISES,
REPRESENTED BY AUTHORIZED ALLOTTEE,
JAMES MATHAI, AGED 67 YEARS,
S/O. MATHAI, MANNOOTHARA HOUSE,
KATTAPPANA KARA, KATTAPPANA VILLAGE,
IDUKKI TALUK, PIN-685508.
BY ADV. SRI.T.M.ABDUL LATHIFF
RESPONDENTS:
1 GOVERNMENT OF INDIA,
REPRESENTED BY ITS SECRETARY TO GOVERNMENT,
MINISTRY OF PETROLEUM AND NATURAL GAS,
NEW DELHI, PIN-110001.
2 INDIAN OIL COOPERATION LIMITED,
REPRESENTED BY GENERAL MANAGER(LPG),
SOUTHERN REGION INDIAN OIL BHAVAN, 139,
NUNGAMBAKKAM HIGH ROAD, CHENNAI, PIN-34.
3 GENERAL MANAGER,
(LPG)-S, PANAMPILLY AVENUE,
PANAMPILLY NAGAR, COCHIN-682036.
ADDL. 4 ANEESH JOSEPH,
S/O. JOSEPH THOMAS, THONIKKAVIL HOUSE,
MARIKKULAM KARA, AYYAPPANKOVIL VILLAGE,
IDUKKI DISTRICT,
REPRESENTED BY HIS POWER OF ATTORNEY HOLDER
BINOY SEBASTIAN,
PANAMTHOTTATHIL, MARIYAKULAMKARA,
AYYAPPANKOVIL VILLAGE,
IDUKKI DISTRICT, PIN 685 507
IS IMPLEADED AS PER THE ORDER DATED 16-06-2020
IN I.A. 01/2020 IN W.P.(C).
WP(C) No.11144/2020
:2 :
R2-3 BY ADV. SRI.M.GOPIKRISHNAN NAMBIAR
R2-3 BY ADV. SRI.K.JOHN MATHAI
R2-3 BY ADV. SRI.JOSON MANAVALAN
R2-3 BY ADV. SRI.KURYAN THOMAS
R2-3 BY ADV. SRI.PAULOSE C. ABRAHAM
R4 BY ADV. SMT.ELSA DENNY PINDIS
R4 BY ADV. SHRI.MATHEW K.T.
R4 BY ADV. SHRI.GEORGE K.V.
R1 BY SRI P.VIJAYAKUMAR, ASGI
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 08-01-2021, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
WP(C) No.11144/2020
:3 :
N. NAGARESH, J.
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W.P.(C) No.11144 of 2020
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Dated this the 8th day of January, 2021
JUDGMENT
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The petitioner, a distributor of LPG cylinders of the
Indian Oil Corporation Limited, is before this Court seeking to
quash Ext.P9 order and to command respondents 2 and 3 to
allow the petitioner to continue his business of LPG
distributorship as per Ext.P3 appointment order in his own
name as licensee.
2. The petitioner is a Partnership Firm represented by
Authorised Allottee. The Authorised Allottee is a person with
75% disability. On account of his disability, the 1 st respondent-
Government of India as per Ext.P1 decided to allot LPG
distributorship at Kattappana on compassionate ground to
him. Consequently, the 2nd respondent-Indian Oil Corporation
awarded distributorship to the Authorised Allottee of petitioner.
Necessary licences were obtained from various authorities
WP(C) No.11144/2020
and the Authorised Allottee commenced the business.
3. The petitioner states that as the Authorised Allottee
was physically handicapped, he was in need of a person to
help him to run the business and therefore in the year 2015, a
partnership was registered as Divine Gas Enterprises wherein
the additional 4th respondent was included as a partner.
Ext.P5 partnership deed provided that the additional 4 th
respondent shall be the Managing Partner of the Firm and he
shall carry on day-to-day affairs of the Firm in the best interest
of the partners.
4. The 4th respondent was not satisfied with the
income derived from the distributorship and he went to Dubai
for better prospects. He executed a Power of Attorney in
favour of one Binoy Sebastian. The relationship between the
Authorised Allottee, who is the original allottee of
Distriutorship, and the additional 4th respondent got strained
and the Authorised Allottee was running the business himself.
The additional 4th respondent, representing as Managing
Director of the Firm, filed O.S. No.287/2019 in the Munsiff's
WP(C) No.11144/2020
Court, Kattappana for permanent prohibitory injunction. An
interim injunction was granted in favour of the additional 4 th
respondent. But, ultimately, the Munsiff's Court dismissed the
application for interim injunction.
5. The petitioner states that respondents 2 and 3
suspended distributorship in favour of the petitioner-Firm as
per Ext.P8. Ext.P8 was passed without any valid reason and
without collecting explanation from the petitioner. The
Authorised Allottee submitted application to respondents 2
and 3 to allow him to carry on with the business as a
proprietorship establishment. However, the said application
was rejected as per Ext.P9 on the ground that such
conversion can be made only with the consent of the other
partner.
6. The petitioner thereafter filed W.P.(C)
No.9306/2020. This Court directed respondents 2 and 3 to
consider Ext.P10 representation filed by the Authorised
Allottee. However, the 1st respondent, without hearing the
Authorised Allottee and without taking into account all relevant
WP(C) No.11144/2020
facts, passed Ext.P12 order refusing to consider the request
for reconstitution of the partnership. The petitioner therefore
seeks to quash Ext.P9 order of suspension and for a direction
to respondents 1 to 3 not to terminate the distributorship of the
petitioner given to the Authorised Allottee as per Exts.P1, P2
and P3.
7. Respondents 2 and 3 resisted the writ petition filing
counter affidavit. Respondents 2 and 3 stated that though the
distributorship was given to the Authorised Allottee of the
petitioner as a sole proprietorship in the year 1993, the
Authorised Allottee sought to reconstitute the distributorship
from proprietorship to partnership by inducting additional 4 th
respondent. Accordingly, a fresh distributorship agreement
Ext.R2(a) was entered into between the 2 nd respondent and
the petitioner-Firm. While so, it was found that the Authorised
Allottee has shifted his residence to Mallur and the additional
4th respondent moved to Dubai. As per Clause 23 of
Ext.R2(a) agreement, the partners of the distributorship
should reside in the place of the distributorship. Respondents
WP(C) No.11144/2020
2 and 3 found that the distributorship was taken over by a
group of people claiming allegiance to the additional 4 th
respondent who was abroad. The additional 4 th respondent
obtained an order of injunction from the court which restrained
the petitioner from operating the distributorship. Therefore,
Ext.P8 order of suspension was issued on 19.09.2019.
Respondents 2 and 3 pointed out that the interim injunction
was in force at that time and it was vacated only on
18.12.2019, after issuance of Ext.P8 suspension order.
8. Respondents 2 and 3 further stated that the
distributor was not placing sufficient funds for supplies of LPG
on account of the disputes between partners which resulted in
severe backlog of orders from the consumers. Furthermore,
the petitioner sold his licenced LPG godown along with land,
which is not permissible as per Clause 14 of Ext.R2(a). It was
due to these deficiencies also that the distributorship was
suspended on 19.09.2019. Consequent to the suspension, all
consumers of LPG from the petitioner-Divine Gas Enterprises
were transferred to a nearby distributor. In fact, the 4 th
WP(C) No.11144/2020
respondent and persons at his behest violently prevented the
officials of the Indian Oil Corporation from taking over the
equipments. Respondents 2 and 3 were therefore forceed to
file a writ petition, W.P.(C) No.25452/2019, seeking police
protection against the petitioner and the additional 4 th
respondent.
9. After the suspension, the Authorised Allottee
approached respondents 2 and 3 seeking reconstitution of the
distributorship from a partnership to a sole proprietorship of
the Authorised Allottee, as per Ext.R2(b). The said letter was
not accompanied by any supporting documents required for
reconstitution. As per Ext.R2(c) Detailed Guidelines for
Reconstitution of LPG Distributorship, application for
reconstitution should be in the prescribed form. It has to be
accompanied by requisite documents. Respondents 2 and 3
therefore sent Ext.P9 letter to the petitioner informing about
the defects. The petitioner did not cure the defects and, on
the other hand, stated that there are disputes between the
partners and therefore documents cannot be produced.
WP(C) No.11144/2020
10. Respondents 2 and 3 stated that for reconstitution
of partnership, Dissolution Deed along with other necessary
documents is to be produced. The petitioner did not produce
Dissolution Deed. In such circumstances, the application for
reconstitution of the firm, cannot be allowed. Since the
petitioner violated the conditions of grant of distributorship,
the distributorship is liable to be suspended and respondents
2 and 3 have not acted illegally or in an arbitrary manner.
11. I have heard the learned counsel for the petitioner
and the learned Standing Counsel appearing for respondents
2 and 3. I have also heard the learned Assistant Solicitor
General of India representing the 1st respondent.
12. It is true that the LPG distributorship was awarded
to the Authorised Allottee on compassionate grounds
pursuant to the directions of the 1 st respondent, in the year
1993. However, the Authorised Allottee sought to convert the
proprietorship into a partnership firm, in the year 2015. The
business under the partnership firm was suspended by
respondents 2 and 3 as per Ext.P8 order dated 19.09.2019
WP(C) No.11144/2020
for the reason that the firm is not placing sufficient funds for
supplies of LPG and as a result, refill backlog is going up in
the market. Respondents 2 and 3 also noted that the
additional 4th respondent, who is a partner of the firm, has
obtained an injunction order from the local court restraining
the major Partner and his Manager from carrying out day-to-
day operations of the distributorship. Respondents 2 and 3
further noted that the licenced LPG godown of the
distributorship, has been sold out to a third party.
13. Subsequently, the petitioner approached this Court
filing W.P.(C) No.9306/2020 and this Court directed the
respondent to consider and pass appropriate orders on the
representation filed by the petitioner. The representation was
considered by the 3rd respondent and was rejected.
14. Ext.R2(a) is the memorandum of agreement
entered into by the firm of the petitioner with respondents 2
and 3. Clause 23 of Ext.R2(a) would show that the partners
of the distributorship are to reside in the place of the
distributorship. Admittedly, the additional 4 th respondent, who
WP(C) No.11144/2020
is one of the partners, has moved to Dubai, even according to
the petitioner. By selling off the licenced LPG godown along
with the land, the petitioner has violated Clause 14 of
Ext.R2(a). There were insufficient funds for supplies of LPG
which had resulted in backlog of LPG supply.
15. From the aforesaid facts, this Court finds that the
suspension of the distributorship by respondents 2 and 3 is
amply justified. The request of the petitioner for conversion of
distributorship from the partnership Firm to a sole proprietary
Firm, was rejected on the ground that the petitioner has not
produced dissolution deed in respect of the partnership.
Ext.R2(c) Detailed Guidelines for Reconstitution of LPG
Distributorship, 2018, indicates that for reconstitution of a
partnership, applicant has to produce necessary documents,
one of them being Dissolution Deed. The petitioner failed to
produce Dissolution Deed. Therefore, rejection of the request
of the petitioner for converting the partnership Firm into a
proprietary Firm or for transfer of distributorship from the
partnership Firm to a sole proprietary Firm of the Authorised
WP(C) No.11144/2020
Allottee, cannot also be found fault with.
16. In the circumstances, this Court finds that the
action of respondents 2 and 3 was in accordance with the
Agreement entered into between the petitioner and
respondents 2 and 3 and rejection of the request as regards
proprietorship was based on Ext.R2(c) Guidelines. The
petitioner has failed to establish violation of any right
conferred.
The writ petition therefore lacks merits and is
therefore dismissed.
Sd/-
N. NAGARESH, JUDGE
aks/04.01.2021
WP(C) No.11144/2020
APPENDIX
PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE APPOINTMENT LETTER
DATED 10.05.1993.
EXHIBIT P2 TRUE COPY OF THE LETTER DATED
18.05.1993, OF INTENDED AWARDING
DISTRIBUTION SHIP ON COMPASSIONATE
GROUND.
EXHIBIT P3 TRUE COPY OF LICENCE DATED 05.10.2018
FORM THE DEPUTY CONTROLLER OF
EXPLOSIVES PANCHAYAT.
EXHIBIT P4 TRUE COPY OF THE D AND O LICENCE DATED
23.02.2019 FROM THE KATTAPPANA
MUNICIPALITY.
EXHIBIT P5 TRUE COPY OF THE RECONSTITUTION OF THE
PARTNERSHIP DEED DATED 20.08.2014.
EXHIBIT P6 TRUE COPY OF COVERING LETTER DATE
23.09.2014 OF THE CORPORATION.
EXHIBIT P7 TRUE COPY OF THE ORDER IN IA
NO.1155/2019 IN OS NO.287/2019 DATED
18.12.2019.
EXHIBIT P8 TRUE COPY OF THE LETTER DATED
19.09.2019 3RD RESPONDENT ISSUED
SUSPENSION OF M/S.DIVINE GAS
ENTERPRISES, KATTAPPANA LETTER.
EXHIBIT P9 TRUE COPY OF THE LETTER DATED
24.02.2020,
EXHIBIT P10 TRUE COPY OF THE EXPLANATION DATED
13.03.2020.
EXHIBIT P11 TRUE COPY OF THE JUDGMENT IN WP(C)
NO.9306/2020 DATED 23.03.2020.
EXHIBIT P12 TRUE COPY OF THE ORDER DATED
22.05.2020.
WP(C) No.11144/2020
EXHIBIT P13 TRUE COPY OF THE SHOW CAUSE NOTICE FOR
TERMINATING DISTRIBUTION-SHIP DATED
16/10/2020.
EXHIBIT P14 TRUE COPY OF THE LEASE AGREEMENT DATED
25/06/2020.
EXHIBIT P15 TRUE COPY OF THE REGISTERED LEASE DEED
DATED 30/10/2020
RESPONDENTS' EXHIBITS:
EXHIBIT R2 A A TRUE COPY OF THE DISTRIBUTORSHIP
AGREEMENT DATED 6.1.2015 EXECUTED
BETWEEN THE 2ND RESPONDENT AND THE
PARTNERSHIP FIRM
EXHIBIT R2 B A TRUE COPY OF THE LETTER DATED
16.10.2019 ISSUED BY THE PETITIONER.
EXHIBIT R2 C A TRUE COPY OF THE DETAILED GUIDELINES
FOR RECONSTITUTION OF LPG
DISTRIBUTORSHIP 2018 DATED 31.10.2018
SR
