Pappu Kumar Yadav vs The Indian Oil Corporation
2021 Latest Caselaw 313 Patna

         IN THE HIGH COURT OF JUDICATURE AT PATNA
                   Civil Writ Jurisdiction Case No.5228 of 2020
     ======================================================

Pappu Kumar Yadav son of Dharmanath yadav, resident of village- Mairy Sudama, P.S. Bhagwanpur Hat, District- Siwan

... ... Petitioner/s Versus

1. The Indian Oil Corporation through its Chairman, G-9, Ali Aval Jang Mall, bandra (East), Mumbai-400051

2. The Deputy General Manager (LPG-S) Patna Area Office, Indian Oil Corporation Limited, 1st Floor, Shahi Bhavan, Exhibition Road, patna-1

... ... Respondent/s ====================================================== Appearance :

For the Petitioner/s : Mr. Prashant Sinha, Adv. For the Respondents : Mr. Ankit Katriar, Adv. ====================================================== CORAM: HONOURABLE MR. JUSTICE PARTHA SARTHY C.A.V. JUDGMENT Date : 25-01-2021

Heard learned counsel for the petitioner and learned

counsel for the respondents through video conferencing.

The petitioner has filed the instant application for the

following reliefs:

"(i) For issuance of writ in the nature of certiorari for quashing of letter no. PAT/LPG /MORAKHAS dated 03-02-2020 issued by the Deputy General manager (LPG-S), Patna Area Office, Indian Oil Corporation Limited whereby the letter of intent issued in favour of the petitioner for running the Rural LPG Distributorship in Morakhas, Siwan has been withdrawn.

(ii) For necessary direction upon the Patna High Court CWJC No.5228 of 2020 dt.25-01-2021

respondent authorities to restore the letter of intent in favour of the petitioner and allow the petitioner to run the Rural LPG Distributorship in Morakhas, Siwan as the petitioner has already invested huge amount and has made all the necessary preparations for running the LPG Distributorship.

                                 (iii)   For      restraining      the    respondent
                          authorities      from       allotting   the    Rural   LPG

Distributorship in Morakhas, Siwan in the OBC category to any other candidate during the pendency of this writ application.

(iv) For any other direction, which your Lordships may deem fit and proper in the facts and circumstances of the case."

The case of the petitioner is that pursuant to the

advertisement published by the Indian Oil Corporation

(hereinafter referred to as 'the I.O.C. Ltd.') in the hindi daily

newspaper 'Hindustan' on 18.6.2017 inviting applications for

grant of rural LPG Distributorship for the location Morakhas in

the District of Siwan. The petitioner applied under the OBC

category. Fulfilling all the required qualifications, he submitted

his online application and was selected for LPG Distributorship

at the Morakhas location in District Siwan under the OBC

category. The I.O.C. Ltd. issued a Letter of Intent as contained Patna High Court CWJC No.5228 of 2020 dt.25-01-2021

in letter dated 27.6.2019 (Annexure-2). It is further the case of

the petitioner that he was enticed by two persons from the

adjoining village for running the business of LPG

Distributorship in a partnership and they entered into a

registered deed of partnership on 31.7.2019 (Annexure-3). Soon

thereafter the two persons started creating trouble for the

petitioner and thus the petitioner got a legal notice dated

9.9.2019 sent to them through his advocate stating therein that

the petitioner cannot proceed with the partnership. The same

was followed by a second and third notice dated 29.10.2019 and

4.1.2020. The three notices are Annexures- 4/A, 4/B and 4/C to

the writ petition.

It is the case of the petitioner that in furtherance of the

intended mischief the two persons who had entered into

partnership with the petitioner filed a compliant before the

I.O.C. Ltd. and on receipt of the said complaint a letter dated

4.12.2019 was written by the Deputy General Manager (LPG-S)

of the I.O.C. Ltd. to the petitioner asking him to explain within

7 days of the receipt of the letter as to why action be not taken

against the petitioner for violation of the relevant clause of the

Letter of Intent dated 27.6.2019. The petitioner filed his reply to

the show cause notice on 30.12.2019, also stating therein about Patna High Court CWJC No.5228 of 2020 dt.25-01-2021

getting a legal notice sent on 9.9.2019 and the steps being taken

by him to get the registered deed dated 31.7.2019 cancelled. He

requested for sympathetic consideration and gave his

undertaking that he will be more conscious and careful in

following the guidelines of the I.O.C. Ltd. By order contained in

letter dated 3.2.2020 (Annexure-7) issued under the signature of

of the Deputy General Manager (LPG-S), Patna area office of

the I.O.C. Ltd., the Letter of Intent dated 27.6.2019 for LPG

Distributorship issued in favour of the petitioner was withdrawn

along with forfeiture of the amount of Rs. 30,000/. It is against

this order dated 3.2.2020 of the I.O.C. Ltd. withdrawing the

Letter of Intent that the instant application has been filed.

It is the submission of learned counsel for the petitioner

that in view of section 41 of the Indian Partnership Act, the so

called deed of partnership being illegal, never came into

existence and stood dissolved at the initial stage itself. It is

further submitted that even if not earlier, the partnership

definitely stood dissolved pursuant to the legal notice dated

9.9.2019 sent on behalf of the petitioner. It was much thereafter

on 4.12.2019 that the show cause notice was issued on behalf of

I.O.C. Ltd. It is thus submitted that on the date of issuance of

the show cause notice the cause/reason for the notice did not Patna High Court CWJC No.5228 of 2020 dt.25-01-2021

exist, the partnership having stood dissolved on or before

9.9.2019.

Mr. Ankit Katriar, learned counsel appearing for the

Indian Oil Corporation submits that Clause 5.4 of the Letter of

Intent dated 27.6.2019 (Annexure-2) in clear terms states that

the petitioner shall not induct any person as his partner nor

make any changes in the constitution of the proposed

distributorship in a manner other than what was intended at the

time of application without prior approval from the Corporation.

He submits that the application against advertisement was solely

by the petitioner and he could not have entered into an

agreement of partnership, the same being clearly in violation of

clause 5.4 of the Letter of Intent dated 27.6.2019. He submits

that the contention of the petitioner that he was enticed and

misled in entering into agreement is in contradiction to Clause 4

of his legal notice dated 9.9.2019 (Annexure-4/A), from reading

of which it would clearly be evident that there arose a dispute

between the parties over a percentage of the profit that they

would share. The petitioner was not misled but consciously

entered into a registered agreement and thus having violated the

terms of the Letter of Intent, the L.O.I. has rightly been

withdrawn for violation of the condition as contained in clause Patna High Court CWJC No.5228 of 2020 dt.25-01-2021

9.3 of the L.O.I. dated 27.6.2019. Learned counsel for the I.O.C.

Ltd. further relies on the judgment in the case of Indian Oil

Corporation Ltd versus Raj Kumar Jha [2012 (2) PLJR 783],

more particularly paragraph no. 8 thereof.

It is submitted that in view of the facts and circumstances

of the case, after giving due opportunity to the petitioner and

considering the reply filed by him, the L.O.I dated 27.6.2019

has rightly been withdrawn by order dated 3.2.2020 (Annexure-

7), impugned herein.

Having heard learned counsel for parties and on going

through the records of the case it transpires that the petitioner

being one of the applicants for grant of L.P.G. Distributorship in

the category of OBC against advertisement on 17-18.06.2017 of

the I.O.C. Ltd. was selected in the draw held and was issued a

Letter of Intent Ref. No.2019/IN000112/ BH./000015/

2312/00009 dated 27.6.2019 regarding proposed LPG

Distributorship at location Morakhas District- Siwan. A

registered deed of agreement dated 31.7.2019 was entered into

between the petitioner with Raju Kumar Singh and Basant

Mishra. As a result of differences, legal notices dated 9.9.2019,

29.10.2019 and 4.1.2020 was sent on behalf of the petitioner to

the other two partners cancelling the partnership entered into Patna High Court CWJC No.5228 of 2020 dt.25-01-2021

between them. It was after two legal notices, that on 4.12.2019

a show cause notice was issued by the I.O.C. Ltd. to the

petitioner and on reply filed by the petitioner, the order

impugned dated 3.2.2020 withdrawing the L.O.I. dated

27.6.2019 has been issued.

From perusal of the L.O.I. dated 27.6.2019 it would

transpire that it states about intention of the I.O.C. Ltd. to offer

LPG Distributorship to the petitioner on the conditions

mentioned therein which have been given in detail under

different clauses split into six headings, the headings being :-

(1) LPG storage godown and showroom.

(2) Finance

(3) Deliver infrastructure

(4) Personal supervision

(5) Commissioning, and,

(9) Withdrawal of Letter of Intent.

Clause 5.4, 9.1 and 9.3 being relevant for the instant case

are being quoted hereinbelow for ready reference.

"5. COMMISSIONING ...............................................

5.4. You are not permitted to induct any one as your partner nor make any changes in the constitution of the proposed distributorship in a manner other than what was Patna High Court CWJC No.5228 of 2020 dt.25-01-2021

intended at the time of application, without prior approval from Corporation.

...............................................

9. WITHDRAWAL OF LETTER OF INTENT 9.1. This letter is merely a Letter of Intent and is not to be construed as a 'firm offer' of LPG Distributorship to you. If we find that the progress being made by you towards the commissioning of the LPG Distributorship or as above is not to our satisfaction, then this letter is liable to be withdrawn along with forfeiture of 10% of security deposit amount deposited by you with the Corporation.

9.3. If any statement made in the application or in the documents enclosed therewith or subsequently submitted in pursuance of the application by you at any stage is found to have been suppressed/ misrepresented/incorrect or false affecting eligibility, then the LOI is liable to be withdrawn without assigning any reason along with forfeiture of amount deposited by you with the Corporation before FVC and in case you have been appointed as a distributor, the distributorship is liable to be terminated along with forfeiture of security deposit remitted by you. In such cases you shall have no claim whatsoever against the respective Oil Company."

Patna High Court CWJC No.5228 of 2020 dt.25-01-2021

By clause 5.4 of the L.O.I. the petitioner/allottee has

categorically been barred from inducting anyone as a partner or

making any change in constitution of the proposed

distributorship, by inducting a partner without prior approval

from the I.O.C Ltd.. So far as the facts of the instant case are

concerned, it is admitted that the petitioner entered into a

registered partnership agreement with two other persons, the

partnership being effective from 31.7.2019. This was in clear

violation of clause 5.4 of the L.O.I dated 27.6.2019. Further

from perusal of the legal notices dated 9.9.2019, 29.10.2019 and

4.1.2020, the contents thereof clearly show that the dispute

between the partners had arisen as the newly inducted partners

were demanding share to the extent of 75% to 80% of the profit

from the petitioner, and it was for this reason that the same

could not continue. The partnership was not being dissolved for

reason of the same being in violation of the terms of the L.O.I.

The contents of the LOI shows that it only talks about the

intent of the IOC Ltd. to offer to the petitioner the LPG

distributorship. The LOI also contained a number of conditions

which had to be satisfied before the issuance of Letter of

Appointment. The LOI also provided that the IOC Ltd. would

not be held responsible for investment which may be made by Patna High Court CWJC No.5228 of 2020 dt.25-01-2021

the petitioner in construction of the godown without having a

proper approach road. It also provided that the LOI may be

withdrawn in case any fact in the application is found to have

been suppressed, misrepresented, incorrect or false. After receipt

of the LOI dated 27.6.2019, the petitioner having entered into a

registered partnership agreement on 31.7.2019 without prior

permission of the IOC Ltd for the purposes of running the LPG

dealership, shows that the petitioner clearly violated the terms of

the LOI and consequentially the action of the IOC Ltd. in

withdrawing the Letter of Intent dated 27.6.2019 cannot be said

to be illegal. Thus the Court finds no merit in the writ

application nor any illegality in the order impugned dated

3.2.2020.

The writ application stands dismissed.

                                                  (Partha Sarthy, J)
Bibhash


AFR/NAFR
CAV DATE
Uploading Date       29.01.2021
Transmission Date