Kerala High Court
Indian Oil Corporation Ltd vs M/S.K.C.Oommen & Son on 17 June, 2025
2025:KER:42422
W.A.No.390 of 2024 1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE SUSHRUT ARVIND DHARMADHIKARI
&
THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.
TH
TUESDAY, THE 17
DAY OF JUNE 2025 / 27TH JYAISHTA,
1947
WA NO. 390 OF 2024
AGAINST THE JUDGMENT DATED 02.08.2023 IN WP(C)
NO.15737 OF 2015 OF HIGH COURT OF KERALA
APPELLANTS:
1
NDIAN OIL CORPORATION LTD
I
REPRESENTED BY DIVISIONAL RETAIL SALES
MANAGER,TRIVANDRUM DIVISIONAL OFFICE, GROUND
FLOOR,PREMIER PARK, INCHAKKAL BYE PASS, VALLAKDAVU
PO,TRIVANDRUM 695008
2
HIEF DIVISIONAL RETAIL SALES MANAGER
C
INDIAN OIL CORPORATION LTD., TRIVANDRUM DIVISIONAL
OFFICE, GROUND FLOOR, PREMIER PARK, INCHAKKAL BYE
PASS, VALLAKDAVU PO, TRIVANDRUM 695008
Y ADVS.
B
SHRI.M.GOPIKRISHNAN NAMBIAR
SRI.JOSON MANAVALAN
SHRI.K.JOHN MATHAI
SRI.KURYAN THOMAS
SHRI.PAULOSE C. ABRAHAM
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W.A.No.390 of 2024 2
HRI.RAJA KANNAN
S
SMT.NAYANPALLY RAMOLA
SHRI.PRANOY HARILAL
SRI.E.K.NANDAKUMAR (SR.)
RESPONDENT:
/S.K.C.OOMMEN & SON
M
AGED 54 YEARS
REPRESENTED BY MC.JOSEN, MANAGING PARTNER,IOC
DEALER, TIRUVALLA 689101, PATHANAMTHITTA DIST.
SHRI.S.ABDUL RAZZAK
THIS
WRIT
APPEAL
HAVING
BEEN FINALLY
HEARD
ON
1.06.2025,
1 THE COURT ON
17.06.2025 DELIVERED
THE
FOLLOWING:
2025:KER:42422
W.A.No.390 of 2024 3
JUDGMENT
Sushrut Arvind Dharmadhikari, J.
This intra court appeal filed under Section 5 of theKerala
High Court Act, 1958, challenges the judgment dated 02.08.2023
passed in W.P(C)No.15737 of 2015, whereby the learned Single
Judge had allowed the writ petition. Being aggrieved, the
respondentsthereinhavefiledthewritappeal.Theoriginalpetitioner
is the respondent herein.
2. The respondent had filed the writ petition praying for the
following reliefs:
" (i) a writ, order or direction in the nature of certiorari
callingfortherecordsofthecaseandquashingExht.P11order
of the 2nd respondent;
(ii)awrit,orderordirectioninthenatureofmandamusto
the 2nd respondent to allow Exht.P6 application toapprovethe
induction as per Exht.P5 as the reason stated in the impugned
order is arbitrary and unsustainable;
(iii) a writ, order or direction in the nature of mandamus
directing the respondents not to take any action to discontinue
Exht.P2 Dealership in any manner for the reason stated in the
impugned order;
(iv) any other writ, direction or order as this Hon' Court
may deem fit and proper on the factsandcircumstancesofthe
case and to allow this Writ Petition with the petitioner's costs."
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W.A.No.390 of 2024 4
3. The brief facts of the case are that the 1st appellant
commissioned a Petroleum retail outlet in the year 1963 as a sole
proprietorship concern with Mr.K.C.Oommenasitsproprietor.Inthe
year 1992, the retail outlet dealership was reconstituted as a
partnershipfirmbyMr.K.C.Oommenbyinductinghisson,Mr.Cherian
Kovoor as a partner in the ratio 51:49. In the year 2003, the
dealershipwasfurtherreconstitutedbyinductingMr.M.C.Josen(who
was an outsider) as a minority partner in the firm along with the
existing partners, Mr.K.C.Oommen and Mr.Cherian Kovoor, in the
ratio 50:25:25. The aforesaid instances of reconstitution of the
dealershipwasdonewiththepriorpermissionoftheAppellantsand
a dealership agreement was also executed on17.10.2003between
the 1st appellant and the above mentioned three partners.
4. Thereafter, pursuant to thedeathofMr.K.C.Oommeninthe
year 2005, Ext.P2 dealership agreement was executed on
10.07.2006 between the 1st appellant and the respondent for a
period of 15 years from 21.05.2005 and thereafter the same would
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W.A.No.390 of 2024 5
continue for a successive period of one year until determined by
either party. Thereafter on application of the respondent, the
Registrar ofFirmsaccordedapprovalon08.01.2014forinductionof
Mr.Shalom Emmanuel Josen, the only son of Managing Partner
Mr.M.C.Josenasthethirdpartner.Thentherespondentsubmitteda
notice to continue the dealership by the 'reconstituted firm' to the
appellants on 13.01.2014 as per clause 46 of Ext.P2 dealership
agreement. The 2nd appellant served a notice dated 31.12.2014to
showcauseagainstterminationofthedealershipallegingthat"such
induction is done without getting prior approval from Indian oil
Corporation Ltd." The respondent filed W.P(C)No.1424 of 2015
against the show cause notice which came to be disposed of with
the following directions:-
" 5. After hearing both the sides, this Court finds that the
matter has to be finalised by the respondents with proper
application of mind as to the circumstances under which,
inductionofthepartnerhasbeeneffectedandastotheextentof
prejudicethathasbeenresulted.Anopportunityofhearingshall
be given to the petitioner in this regard and appropriate order
shall be passed in accordance with law, at the earliest, at any
rate,within'onemonth'fromthedateofreceiptofacopyofthis
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W.A.No.390 of 2024 6
judgment. It is also made clear that, if any stringent action is
takenbytherespondent,involvingterminationofthedealership,
it shall not be given effect to, for a period of 'one month'
thereafter, so as to enable the petitioner to pursue further
remedy, in accordance with law."
5.Thereafterthe2ndappellantdecidedthedisputeagainstthe
respondent on a wrong finding that "therespondenthaschallenged
the dealership set up without prior written approval of the
Corporation, which constitutes a clear violation of dealership
agreement." Being aggrieved,therespondentfiledW.P(C)No.15737
of 2015 challenging the same. The learned Single Judge after
hearing both sides and on perusal of the records came to the
conclusion that the respondent has complied with clause 46 and
there was no such defiance as pointed out by the appellants.
Resultantly, the impugned Ext.P11 order dated 21.03.2015 was
quashed, writ petition was allowedwithadirectiontotheappellants
toaccepttherequestoftherespondentasexpeditiouslyaspossible,
preferably within two months. Being aggrieved, the respondents in
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W.A.No.390 of 2024 7
thewritpetitionhaveapproachedthisCourtchallengingthefindings
of the learned Single Judge.
6. The learned counsel for the appellants submitted that the
learned Single Judge erred in interpreting clause 28 and 46 of the
dealershipagreementandcontendedthatreconstitutioncannottake
place without prior approval and therefore clause 28(c) would be
applicabletothefactsandcircumstancesofthecase.Therefore,the
judgment passed by the learned Single Judge deserves to be set
aside and the appeal be allowed.
7. Per contra, the learned counsel appearing for the
respondent opposed the afore prayer and submitted that the only
issue involved in thisappealisinterpretationofclause28and46of
the dealership agreement. For the purpose of convenience, clause
28 and 46 of the dealership agreement is reproduced below:
"28. Except with the previous written consent of the
orporation (which consent the Corporation may initssoleand
C
absolute discretion withhold)
a) The Dealer shall not enter into any arrangement,
contract or understanding whereby the operationsoftheDealer
hereunder are or maybecontrolled,carriedoutand/orfinanced
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W.A.No.390 of 2024 8
y any other persons, firm or company whether directly or
b
indirectly and whether in whole or in part;
b) The Dealer himself (if he is an individual) or the
partners themselves (if the Dealer is a partnership firm) or the
whole-time office bearers/elected members (if the Dealer is a
Co-operativeSociety)shallnot,takeupanyotheremploymentor
engage in any other business and/or profession apart from the
operation of the Dealership which is the subject matter of this
Agreement;
c) The Dealer (if it be a firm or a Co-operative Society)
shall not effect any change in its constitution whether in the
identity of its partners or appointment of whole-time office
bearers or elected members or in the terms of the Deed of
Partnership or of the bye-laws as the case may be;
d)TheDealer(ifitbeaprivatelimitedcompany)shallnot
cause or permit anytransfer/sinitsshareholding(transmission
by death excluded).
46. Notwithstanding anything to the contrary herein
c ontained, in the event of the Dealer being a partnership firm,
this Agreement shall automatically come to an end and stand
terminated upon any change in the constitution of the firm,
Whether by retirement or death of any partner(s) induction of
new partner(s) or otherwise howsoever unlessafterreceiptofa
written noticefromtheoriginalsurvivingpartner(s)oftheDealer
firm of such death or retirement or induction, the Corporation
shallhaveexpresslyagreedinwritingtocontinuetheDealership
with the surviving partner(s) or with the reconstituted firm. Any
suppliesoftheproductsmadebytheCorporation,subsequentto
the death or retirement of a partner or the induction of new
partner(s), with or without the knowledge of the death or
retirement or induction, or any other action on the part of the
CorporationunderorinpursuanceofthisAgreementsubsequent
tosuchdeathorretirementorinductioninfavouroforinrelation
to the surviving partner(s)and/orthereconstitutedfirmshallnot
andshallnotbedeemedtoconferanydealershiporotherrights
in favour of the surviving partner(s) and/or the re-reconstituted
firm shall not and shallnotbedeemedtoconferanddealership
or other rights in favour of the surviving partner(s) and the
reconstituted firm unless and until the Corporation conveys in
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W.A.No.390 of 2024 9
ritingitsspecificapprovalordealershiporotherrightsuponthe
w
surviving partner(s) and /or the reconstituted firm as the case
maybeandtheCorporationshallalwaysbeatlibertywithoutany
previous notice to discontinue, withhold or stop any such
supplies or perform any such act as it deems fit as its discretion."
8.ThelearnedSingleJudgewhiledealingwiththewritpetition
came to the conclusion that clause 46 above, starts with a
non-obstante clause which would mean that the other conditionsof
theagreementwouldnotbetakenintoconsiderationforthepurpose
of resignation, induction or reconstitution of the firm. On plain and
simplereadingoftheprovisionsoftheaforesaidclauses,itdoesnot
convey that the manner and mode in which the permission was
sought by inducting the son of other accepted and acknowledged
partnernamely,CherianKovoor,whowasnotinductedindefianceof
the provisions of the aforementioned clauses.
9. Admittedly the appellants are served with a written notice
from the original surviving partners aboutsuchinduction,theIndian
Oil Corporation is obliged to have expressly agreed in writing to
continue the dealership with the surviving partners or with the
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W.A.No.390 of 2024 10
reconstituted firm. The learned Single Judge after examining the
provisions of clauses has come to the conclusion that clauses 28
and 46 are not required to be read in conjunction with each other,
sinceclause46startswiththenote"notwithstandinganythingtothe
contrary herein contained,......". The learned SingleJudgewasright
in coming to the conclusion andallowingthewritpetitionaswellas
directing the appellants herein to accept the request of the
respondent submitted as far back as on 08.01.2014.
WefindnoerrorinthejudgmentpassedbythelearnedSingle
Judge; since the same is in accordance with law. The present writ
appeal, being bereft of merit and substance, is accordingly
dismissed. No order as to costs.
Sd/-
SUSHRUT ARVIND DHARMADHIKARI
JUDGE
Sd/-
SYAM KUMAR V.M.
JUDGE
MC/12.6
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W.A.No.390 of 2024 11
APPENDIX OF WA 390/2024
RESPONDENT ANNEXURES
Annexure R1(a)
rue
T copy
of
intimation/letter dated
29-09-2021
sent
by
therespondentto
the appellant
Annexure R1(b)
True
copy
of
intimation/letter dated
07-09-2023
sent
by
therespondentto
the appellants
Annexure R1(c)
True
copy
of
letter dated
06-10-2023
with
relevant clauses of 2018
industry policy
Annexure R1(d)
True
copy of reply/letter dated
15-11-2023 delivered on 17-11-2023
