Dayaloo Mal Gian Chand and Others vs Union of India and Others

K. Kannan, J.

The petitioners challenge the order issued on 09.12.2013 (Annexure P-16) rejecting the plea for restructuring of the dealership after death of some partners. The original Kerosene/LDO dealership agreement had been entered on 13.02.1974 by the Indian Oil Corporation with the partnership firm carrying on business under the name of M/s. Dayaloo Mal Gian Chand at Pathankot. M/s. Day-aloo Mal Gian Chand consisted of Dayaloo Mal Gian Chand and his three sons, namely, Subhash Puri, Avinash Puri and Sudhir Puri. Gian Chand Puri and Subhash Puri died first. Petitioner No. 2, namely Paras Puri is the son of Sudhir Puri. It appears that before the request for restructuring the dealership, the area of dealership at Pathankot extension dealership had been given for the place at Kangra also. The petitioner has applied for restructuring the dealership and seeking for the dealership to be issued in his name after the death of his father, for the extension counter at Kangra, and retention of the dealership at Pathankot in the name of his uncle Avinash. The objection is that the Cooperation has the power, at its discretion to increase or decrease area and now through the decision taken, it has decreased the area of dealership by withdrawal the extension granted at Kangra. The counsel for the Corporation would submit that the petitioner is not a party to the agreement at that time and a plea for reconstructing done at his instance and for grant of dealership in his name would be against the guidelines. The dealership at Kangra was only an extension for the dealership at Pathankot and that cannot be bifurcated as dealership for one at Pathankot and another at Kangra. The counsel also states that since the petitioner is claiming a dealership for Kangra, the jurisdiction shall decide only with the office at Kangra in Himachal Pradesh and the writ petition itself is without jurisdiction.

There is no doubt that the original agreement had been among the petitioner''s grand-father, his father and the paternal uncles who had constituted themselves as a partnership. There is a again no dispute that the dealership originally granted for the place at Pathankot still continues and the extension was awarded in terms of what was permissible. The regulations of the corporation provide that on the death of any partner or any reconstructing of the partnership which has secured the dealership shall be done with the concurrence of the corporation. The petitioner has under the belief that reconstructing could extend as far as to bifurcate the dealership awarded for one place with extension as dealership for two different places. Evidently, according to the respondent-Corporation such a manner of bifurcation is not possible.

Learned counsel appearing on behalf of respondent No. 1 explains that when the agreement was originally executed on 13.02.1974 with reference to confirmation of dealership to M/s. Dayaloo Mal Gian Chand the place described was Pathankot Municipal limits. The dealership was not also in respect of facilities in Kangra District. It was extended as an additional point subsequently through a letter dated 20.12.1976 (Annexure P-3). The said letter specifically refers to the fact that the dealership area was since then open for Pathankot, Tehsil Kangra & Chamba Distt. of H.P. And Mukerian, Talwara only.

Counsel states that this change was in tune with provisions of Clause 1(C) of the original agreement. Clause 1(C) of the original agreement reads that the dealer will, during the continuance of the agreement confine himself to selling in the area or territory mentioned in the Schedule attached to the agreement and also such other points as may from time to time be authorised by the Corporation in writing. The additional points brought through Annexure P-3 was therefore, pursuant to the right preserved to the dealer under Clause 1(C) and this was itself a proof for the fact that the original dealership agreement was not for the whole area of both Pathankot and Kangra but it was only for Pathankot Municipal limits.

The additional information brought after the directions given by the Court on 05.12.2014 are that the second petitioner - Paras Puri has given a relinquishment deed duly attested on 16.11.2013 with respect of partnership business in which his father was associated with his brother Avinash Puri and his son Arvind Puri and consequently re-constitution which is sought by the petitioner cannot be sustained, he having relinquished his share in the partnership.

The objection for reconstitution of the firm and allowing for dealership to the facilities at Kangra stem from two circumstances: (i) The original dealership was only with reference to Pathankot Municipal limits and therefore, there cannot be a dealership awarded to the second petitioner in respect of the additional point, which was incorporated by Clause 1(C) of the dealership agreement, (ii) The second petitioner had relinquished interest from the partnership and therefore, reconstitution as sought for cannot be given. This is supported by the additional affidavit giving an extract of statement given by the second petitioner himself to the authorities that they had brought about a change in the constitution of the firm retaining the facilities at Kangra for the second petitioner''s father and the facilities at Pathankot to Avinash Puri without taking approval from the Corporation.

If a partnership is in respect of dealership, which was with reference to only a specified area which in this case is Pathankot Municipal limits and by virtue of Clause in the dealership agreement itself an additional point was added, it must be taken that the benefits accruing from conferring dealership to an additional point will ensure to the partnership without any further partnership agreement to be written there for. If there was a requirement under the Rules that any reconstitution of a partnership which is conferred with the benefit of dealership could be done only with the concurrence of the Corporation. If it was not so done, justifiably the Corporation could take appropriate corrective action, if there was no serious issue of financial misdeeds of parties or prejudice to the Corporation. The requirement that any reconstitution shall be done only with the concurrence of the Corporation is contract-driven and has also reasonable basis. The Corporation which hands over its facilities, which distribute the precious petroleum products to the public through a distribution network depend on the credit-worthiness of the dealers and the property, which is offered by them. It is expected that such dealers will not make any alteration in their own legal structure without the concurrence of the Corporation that can create a prejudice. In this case admittedly when a reconstitution of the firm of the second petitioner''s father - Avinash Puri and his brother had taken place without concurrence of the Corporation, but if a request was forthcoming that the reconstitution done earlier without concurrence could be condoned it shall be necessary for the Corporation to apprise itself on the issue whether there was any mala fide that could be attributed and whether any serious violation has occurred to deny to continuance of dealership. I have not been shown that any particular prejudice to the Corporation has ensued and if parties seek for continuation of dealership and that the previous letter of relinquishment had been sent without prior legal advice, it should have been considered appropriately keeping in mind the interest of the Corporation.

The objection that since the second petitioner has relinquished his interest in the partnership, he cannot seek for reconstitution now, is meaningless. This is a wrong reading of the situation. The relinquishment a copy of which is filed as Annexure R-1/2 is only with reference to the interest of the partnership in which the second petitioner''s father was associated with in respect of dealership at Pathankot and it makes no reference to the additional point, which was brought through the subsequent letter, which is referred to above. If original dealership agreement provides expressly for additional points to be added and if such an additional point was also brought about subsequently in favour of the partnership, it must be taken in law that the additional point was incorporated into the dealership which was conferred under the memorandum of agreement dated 13.02.1974. It would require no fresh document of dealership for the additional point only because the additional point was exercise of a Clause in the original document and the operation of the original terms of the dealership agreement must be taken to include the facilities in Kangra also by incorporation. Inclusion of other facilities by doctrine of incorporation is known in civil proceedings relating to contractual obligations as well as in bequests through Wills. I will therefore, not find that the absence of reference of the facilities at Kangra in the original dealership agreement to make any difference.

As of now the situation that we have to deal with is in respect of the dealership agreement that was conferred with in favour of M/s. Dayaloo Mal Gian Chand for facilities within the Municipal limits of Pathankot, as stood extended to the Kangra, one partner in the partnership has expired. His son is alive, who is the second petitioner. Since the dealership is with reference to both Pathankot and Kangra, taking note of the fact that the second petitioner wants nothing of interest of the partnership in respect of the dealership in Pathankot, the Corporation will accept the reconstitution of the firm to operate in two different places (i) by the second petitioner with reference to the facilities at Kangra and (ii) another in favour of Avinash Puri and his son with reference to the facilities in Pathankot.

The counsel for the petitioners submits that there is amity in the family of himself and his paternal uncle and if it is not possible to bifurcate, the petitioner will have no problem about seeking for reconstructing of the partnership with himself as son of his father who was an erstwhile partner and the surviving partner Avinash as the other one to carry on the dealership at Pathankot with extension counter at Kangra. There was simply no justification for cancellation of dealership at Kangra. Even while recognizing that it is within the discretion of the Corporation to limit the dealerships area, if it has resulted in withdrawal to the place at Kangra on account of a request for an exclusive allotment of dealership to the petitioners, there could be nothing wrong in reversing the decision if the petitioner himself withdraws a request for separate dealership.

There seems to be already a petition given under clause (7) of the Reconstitution of Dealership Guideline dated 01.12.2008 at the instance of the petitioner. The petitioner will be at liberty to present a fresh petition alongwith his uncle Avinash who was the partner in the firm which had originally entered into an agreement on 13.02.1974. If such a request is made that supplants the previous representation given for reconstructing, the respondent will consider the same and take a decision within six weeks from the date of passing of the order. The impugned order is quashed and the writ petition is disposed of on the above-stated terms. The writ petition is allowed.