Dismissed

Bellam Suryavani v. The Managing Director -Lpg Region Hindustan Petroleum Corporation Limited

Andhra Pradesh HC17 Dec 2021WP/23545/2021

Case brief

AI extract

What is this about?

The petitioner challenged an order terminating her Letter of Intent for an L.P.G. distributorship due to alleged false declaration regarding her residence in the affidavit. The court examined whether the authorities acted within the scope of the show cause notice and contractual terms.

What did the court decide?

Writ petition dismissed and consequential miscellaneous petitions closed.

Bellam Suryavani Vs The Managing… — Pension and Retirement Benefits | Andhra Pradesh HC (2021)

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THE HON’BLE SRI JUSTICE C. PRAVEEN KUMAR

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Writ Petition No.23545 of 2021

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ORDER:

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The present writ petition came to be filed seeking issuance of a writ of Mandamus to declare the impugned Order dated 23.09.2021, terminating the Letter of Intent, dated 26.12.2017, issued to the petitioner in relation to L.P.G Distribution at Machilipatnam (Kalekhanpeta), Krishna District, as illegal and arbitrary.

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The facts, in issue, are as under:

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i) A notification was issued by the respondents on 15.09.2013, calling for applications from eligible candidates for L.P.G. Distributorship. Pursuant thereto, the petitioner made an application on 16.11.2013, and the lots were drawn on 13.12.2016 in which the petitioner was selected. A Letter of Intent [for short, “L.O.I.” ] was issued on 26.12.2017. Thereafter, on 28.05.2019, the petitioner submitted a representation to the respondents for reconstitution of the Distributorship. After the grant of L.O.I, the petitioner claims have spent huge amounts, fulfilling the conditions stipulated in the L.O.I. Though, the petitioner requested the respondents for issuance of Letter of Appointment [for short, “L.O.A.” ] but to no avail.

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ii) While things stood thus, a show cause notice, dated 16.03.2020 came to be issued to the petitioner calling upon

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him to explain as to why the L.O.I. dated 26.12.2017, should not be cancelled, in terms of Clause 21 of the Guidelines for Selection of Regular Distributors, 2013 and Clause 9.3 of L.O.I. dated 26.12.2017, on the ground that the petitioner furnished false information with regard to her residence in India. After considering the explanation submitted by the petitioner to the show cause notice, the Deputy General Manager, Hindustan Petroleum Corporation Limited, passed an order on 07.07.2021, terminating the L.O.I. dated 26.12.2017.

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iii) Questioning the same, W.P.No.13601 of 2021 was filed before this Court. By an order dated 27.07.2021, a learned Single Judge of this Court, set aside the order of termination dated 26.12.2017 and remanded the matter back to the respondent No.2 for consideration of the issue afresh after giving an opportunity of hearing to the petitioner or her General Power of Attorney Holder. It was further directed that the said process shall be complete within a period of four (04) weeks. Pursuant thereto, the Order impugned in the present writ petition came to be passed wherein the authority after hearing the petitioner passed the order, terminating the L.O.I. dated 26.12.2017 for L.P.G. Distributorship at Machilipatnam, Kalekhanpeta, Krishna District. Assailing the same, the present Writ Petition is filed.

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Sri C.Nageswara Rao , learned Senior Counsel appearing on behalf of Smt. K. Aruna, learned counsel for petitioner, mainly submits that the reasons given in the Order impugned are contrary to the record, and do not stand to the test of reasoning. It is mainly contended that the authority has travelled beyond the show cause notice issued. According to him, if really, the reason for termination is that the petitioner has furnished false information and has violated Clause 21 and Clause 9.3, a separate show cause notice ought to have issued, but instead, the Order impugned came to be passed basing on the show cause notice, which was issued only to explain the incorrect information furnished by the petitioner. In other words, the learned Senior Counsel would contend that no reasonable opportunity was given to explain the reasons given for cancelling the L.O.I.

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Learned Senior Counsel appearing for petitioner would further submit that the petitioner had made a request application for reconstitution of the Distributorship, in which he categorically stated that she is residing along with her children in U.S.A. and therefore, requested to add the G.P.A. Holder as a partner so as to avoid any mal-functioning or dis-functioning of the Distributorship. It is further stated that the petitioner herein was in India on the date of notification and the subsequent developments brought to the

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notice of the authorities, by the petitioner herein, cannot be a ground to reject the L.O.I.

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On the other hand, Sri G. Rama Gopal, learned counsel for Corporation submits that the affidavit submitted by the petitioner clearly indicate that a false declaration was made, as if the petitioner is residing in India. It is further stated that the dispute between the parties being contractual in nature, the remedy for the petitioner would be to approach the Civil Court, but definitely not by way of a Writ Petition under Article 226 of the Constitution of India.

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Sri G. Rama Gopal, learned counsel for Corporation further submits that a reading of the show cause notice, as a whole, would clearly indicate that the notice was infact given for violation of Clause 9.3 of L.O.I. dated 26.12.2017 and Clause 26 of the Distributorship Selection Guidelines, 2013. He further submits that though a notice was given to the petitioner to appear in-person and explain her stand, but the petitioner failed to appear in-person. However, an opportunity of hearing through Video Conference was given, which was attended to by the petitioner. It is further pleaded that the L.O.I. was obtained by submitting a false affidavit stating as if, the petitioner is a resident of India, but the material filed by the petitioner show that she staying in U.S.A since 2015 with her family. As L.O.I. was obtained by

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submitting false information, the order terminating the L.O.I. requires no interference.

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In so far as the amount invested for procuring licence, godown, show-room and other infrastructure for operation of L.P.G. Distributorship is concerned, he submits that the same shall not come in the way of passing the order, as no consent was given by Hindustan Petroleum Corporation Limited to operate the L.P.G. Distributorship.

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The point that arises for consideration is, whether the Corporation was right in cancelling the L.O.I. dated 26.12.2017?

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Before proceeding further, it would be just and proper to refer to the relevant clauses in the L.O.I. The Clauses 9.1 and 9.3 of the L.O.I. which fall under the caption withdrawal of L.O.I., reads as under:

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9.1. This letter is merely a Letter of Intent and it 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 above is not to our satisfaction, this letter is liable to be withdrawn along with forfeiture of the amount deposited by you with the Corporation before FVC. You need to submit the progress periodically.

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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 the

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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 the security deposit remitted by you. In such cases you shall have no claim whatsoever against the respective Oil company.

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It would also be appropriate to refer to Clause 26 of the Distributorship Selection Guidelines, 2013, which reads as under:

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“If any statement made in the application or in the documents enclosed therewith or subsequently submitted in pursuance of the application by the candidate at any stage is found to have been suppressed / misrepresented / incorrect or false affecting eligibility, then the application/candidature is liable to be rejected without assigning any reason.

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From the above, it is clear that under the Dealer Selection Guidelines, if any statement made by the applicant in pursuance of the application at any stage is found to have been suppressed / misrepresented / incorrect or false, affecting eligibility, then the applicant‟s application/candidature is liable to be rejected without assigning any reason.

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Much stress has been laid on the proceedings dated 16.03.2020 issued by Hindustan Petroleum Corporation Limited, which is the letter addressed by the Corporation to the petitioner. The subject of the said letter relates to cancellation of L.O.I. dated 26.12.2017. This letter was treated as a show cause notice wherein the petitioner was directed to submit her explanation within fifteen (15) days from the date of receipt of this notice, in default, appropriate action namely rejection of application and cancellation of L.O.I. dated 26.12.2017 would be taken in terms of Clause

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26 of the Distributorship Selection Guidelines, 2013 and Clause 9.3 of the L.O.I. The substance in the show cause notice reveal that in the draw of lots held on 13.12.2016, the petitioner was selected and L.O.I. was issued subject to compliance of the certain terms and conditions mentioned therein. Pending issuance of further proceedings, the Corporation received a letter on 28.05.2019, from the petitioner, for reconstitution of the Distributorship by inducting Smt. N. Radhika Madhavi as a financial partner due to frequent travel of the petitioner to U.S.A. to lookafter her children who were studying outside the State. The show cause notice further indicates that during the scrutiny of reconstitution of Distributorship, it was found from the copies of the Passport submitted by the petitioner that she is a Non-Resident Indian, residing in U.S.A. and holding a Green Card.

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The show cause notice further states that it is necessary and essential for the L.O.I. Holder to be present personally to handle all the pre-commissioning activities of the subject distributor. Hence, the petitioner was asked to answer the violation of the guidelines for selection of regular distributorship, namely Clause 21 and Clause 9.3, referred to earlier. Infact, explanation to the said show cause notice was submitted on 24.08.2021 and subsequent thereto i.e.,

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on 23.09.2021, the order impugned in the writ petition came to be passed.

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As stated earlier, the main argument of Sri C. Nageswara Rao, learned Senior Counsel appearing for petitioner is that the authorities have travelled beyond the show cause notice issued and cancelled the L.O.I., which is in violation of principles of natural justice. As stated earlier, in the show cause notice, dated 16.03.2020 issued to the petitioner, it was mentioned that the petitioner has suppressed certain material facts which run contrary to the guidelines namely that the petitioner is a resident of U.S.A. holding a Green Card and staying in U.S.A., while it is essential for the L.O.I. Holder to be personally present and handle all the pre-commissioning activities of the subject distributor. The show cause notice further states that these acts, more particularly, the affidavit etc., are in violation of Clause 21 of the Guidelines and Clause 9.3 of the L.O.I. The show cause notice categorically refers to violation of these two clauses and the petitioner was called upon to explain on these aspects.

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Clause 21 inter alia states that, “if any statement made in the application or in the documents enclosed therewith or subsequently submitted in pursuance of the application by the candidate at any stage is found to have been suppressed

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/ misrepresented / incorrect or false affecting eligibility, then the application / candidature is liable to be rejected without assigning any reason”. Similarly so, in Clause 9.3 of L.O.I. in the instant case, the notification was issued on 16.11.2013 calling upon applications for L.P.G.

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Distributorship; draw of lots were held on 13.12.2016. During the field verification, an affidavit of the petitioner dated 21.10.2017 came to be submitted and thereafter L.O.I. was issued on 26.12.2017. On 28.05.2019, the petitioner made an application for reconstitution of the Distributorship. The information furnished by the petitioner in the month of May, 2019 i.e., in the application filed for reconstitution of Distributorship clearly reveal that the affidavit which was filed on 21.10.2017 i.e., prior to issuance of L.O.I., is false.

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It will be appropriate to refer to the relevant portion of the affidavit dated 21.10.2017, which is as under:

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“1. That I am an Indian Citizen and residing in India.

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That my date of birth is: 18.03.1977 (Eighteenth March 1977)

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3................

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4.................

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Sd/Signature of person making affidavit (Ballem Suryavani)

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Solemnly affirmed and declared before me on this 21^st day of 2017”.

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From the above, it is clear that the contents of the show cause notice disclose about the false declaration made in the affidavit, which run contrary to the papers filed along with the application for reconstitution of Distributorship. The same was also the subject matter of the personal hearing, to which a reply was given by the petitioner, which I will refer a little later. Having regard to the above, it cannot be said that the respondents have gone beyond the contents of the show cause notice. Further, a reading of the show cause notice would clearly indicate that the authorities while referring to the incorrect information furnished by the petitioner with regard to her residence ship referred to the Clauses in L.O.I. and Guidelines for Selection of Regular LPG Distributors, 2013. Hence, the argument that Clause 21 and Clause 9.3 referred in the show cause notice have nothing to do with the earlier part of the show cause notice may not be correct.

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Sri G. Rama Gopal, learned counsel for Corporation, mainly submits that though the authorities in the second round of litigation hold that the petitioner is an Indian citizen, to give a finding holding that she is not residing in India either on the date of giving the affidavit i.e., on 21.10.2017 or later on. But, it is to be noted that residing in India is different from resident of India. Both the connotations may not go together that a person holding a Green Card may reside in U.S.A., but it is necessary that he/she has to

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permanently stay or reside in U.S.A. till citizenship is given. It is a matter of common knowledge that only for a particular period of time in a year one has to stay in U.S.A.

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A reading of the material placed before the Court along with the Order impugned would show that the petitioner is a Green Card Holder staying in U.S.A. since July, 2015 and her husband is also working in U.S.A. while her children are studying there. The said information was disclosed by the petitioner at the time of personal hearing through Video Conference pursuant to the orders of this Court. Further, two issues were raised at the time of personal hearing namely (1) Whether the petitioner physically was present in India or not when she signed the affidavit dated 21.10.2017? (2) Whether she has been a resident of India from 2015 onwards till the date of issuance of show cause notice, dated 16.03.2020. In response to the same, the petitioner submitted a written explanation in which it is stated that:

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“The stamp paper for affidavit with my name was sent to me in post by my GPA holder Radhika Madhavi Nallamothu from India and I signed the same in the United States of America in front of registered attorney general Notory Charles Atteyeh. I sent the affidavit document to India via my father-in-law as he travelled to India that time. It was not at all a false affidavit. The affidavit submitted to you was signed by me 100% in front of the attorney general”.

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But, a perusal of the affidavit shows that the same was attested by an Advocate and Notary, Sri V.J.M. Lohiya in

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Machilipatnam, Krishna District. The document reveals as if the signature of the petitioner was made before him. But, as stated earlier, pursuant to the querry raised by the Deputy General Manger, LPG on 20.08.2021, asking the petitioner to inform as to whether she was in India on that day or not on 21.10.2017, he replied as stated supra .

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From a reading of the above, it is very clear that a stamp paper was sent to America through her friend in India wherein she signed the same in U.S.A. infront of a registered Attorney General Notary Charles Atteyeh and thereafter she sent the document to India through her father-in-law who was returning to India at that time. Therefore, her version in the reply now is totally contrary to the contents of the affidavit dated 21.10.2017, which indicates as if the said affidavit was executed in India. The same amounts to a false declaration which came to light at the time of considering the application for reconstitution of the distributorship.

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As per the conditions of L.O.I. and Guidelines for Selection of Regular Distributors, 2013 which are referred to earlier, if the authorities find/notice a false declaration made even after issuance of L.O.I., they have the power to cancel the L.O.I. Therefore, it cannot be said that the action taken by the authority is illegal or incorrect and as such, the same warrants no interference of this Court.

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