Dismissed

Smt Kavya v. the Chief General Manager (Lpg-Kaso)

Karnataka HC19 Apr 2021WP/306/2021

Case brief

AI extract

What is this about?

This writ petition challenged the termination of an LPG distributorship. The Court held that the petitioners breached a solemn undertaking to resign from another job and failed to produce proof of acceptance, thus losing entitlement to discretionary relief under the constitution. The petition was dismissed.

What did the court decide?

Petition dismissed; termination letter not quashed; no costs awarded.

Smt Kavya Vs the Chief General Manager… — Contract and Commercial Disputes | Karnataka HC (2021)

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W.P No.306/2021

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 19^TH DAY OF APRIL, 2021

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BEFORE

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THE HON’BLE MR. JUSTICE P.S. DINESH KUMAR

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WRIT PETITION No.306 OF 2021 (GM-RES)

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BETWEEN :

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SMT. KAVYA W/O LOKESH AGED ABOUT 26 YEARS R/AT BANASANDRA VILLAGE KASABA HOBLI TURUVEKERE TALUK TURUVEKERE DISTRICT

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M/S. SHWETHA GRAMEENA LPG VITARAK REPRESENTED BY ITS PARTNER SRI. LOKESH S/O CHANNAPPA AGED ABOUT 37 YEARS R/AT BANASANDRA VILLAGE KASABA HOBLI TURUVEKERE TALUK TURUVEKERE DISTRICT ... PETITIONERS

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(BY SHRI. PRAKASH T. HEBBAR, ADVOCATE FOR SMT. M.R. SINCHANA, ADVOCATE )

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AND :

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THE CHIEF GENERAL MANAGER (LPG-KASO) INDIAN OIL CORPORATION LIMITED MARKETING DIVISION KARNATAKA STATE OFFICE INDIAN OIL BHAVAN NO.29, P.KALINGARAO ROAD (MISSION ROAD) BANGALORE-560 027

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W.P No.306/2021

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THE DEPUTY GENERAL MANAGER INDIAN OIL CORPORATION LIMITED MARKETING DIVISION KARNATAKA STATE OFFICE INDIAN OIL BHAVAN NO.29, P.KALINGARAO ROAD (MISSION ROAD) BANGALORE-560 027 ... RESPONDENTS

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(BY SHRI. DHANANJAY JOSHI, ADVOCATE FOR C/R1)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE TERMINATION LETTER DTD.11.12.2020 ISSUED BY THE R-1 VIDE ANNX-N AND DIRECT THE RESPONDENTS TO CONSIDER THE REPLY DTD.19.09.2020 MADE THROUGH E-MAIL BY THE PETITIONER NO.1.

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THIS WRIT PETITION, HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 05.04.2021, COMING ON FOR PRONOUNCEMENT OF ORDERS THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:-

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ORDER

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Petitioners have challenged termination of their LPG distributorship communicated by Indian Oil Corporation vide its letter dated 11.12.2020 as per Annexure-N.

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Petitioners were selected as an LPG distributors

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by the Oil Corporation. On 13.11.2013, a distribution agreement was entered into between the Oil Corporation and Shri. Lokesha, partner in Shwetha Gramina LPG Vitark, the second petitioner herein Shri. Lokesha was working in

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W.P No.306/2021

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Hewlett Packard at the material point of time. He gave an undertaking to the Oil Corporation that he would resign from his post and submit the proof of acceptance of resignation. On 07.06.2019, Oil Corporation received a complaint that Shri. Lokesha was full time employee of HP Global Software Pvt. Ltd. Oil Corporation issued a notice as per Annexure-G to show-cause as to why the distribution agreement should not be terminated. Second petitioner challenged it in this Court in W.P. No.52679/2019 and withdrew the same on 20.12.2019. In this writ petition, petitioners have challenged the termination letter.

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Shri. Prakash T. Hebbar, learned Advocate for

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petitioners urged two grounds in support of this writ petition:

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• Oil Corporation has permitted petitioners to operate the LPG dealership from 2013 to 2020. Therefore, it has waived its right to terminate the agreement; and

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as per condition No.3.3 in the Letter of intent, Annexure-A, second petitioner has inducted his wife

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W.P No.306/2021

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as a co-owner. She is petitioner No.1. She has been running the business.

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Therefore, the termination is bad in law.

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Shri. Dhananjay Joshi, for Oil Corporation submitted that as per clause 37 of the agreement, petitioners have filed an application under Section 9 of the Arbitration Act¹ before the City Civil Court and the same is registered as A.A No.9/2020 and it is pending adjudication. He further submitted that second petitioner had undertaken to tender resignation and produce proof of acceptance. This fact is not denied by the petitioners. Accordingly, he prayed for dismissal of this writ petition.

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I have carefully considered rival contentions and perused the records.

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Undisputed facts of the case are, second petitioner had undertaken to resign from his post and to

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1 Arbitration and Conciliation Act, 1996.

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W.P No.306/2021

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produce proof of acceptance of resignation But he has not done so.

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Shri. Hebbar, placing reliance on paragraphs No.

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103 to 105 and 110 in Kalpraj Dharamshi and Another Vs.

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Kotak Investment Advisors Ltd and Another² submitted that

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Oil Corporation has waived the action of petitioner by remaining complacent for several years. Therefore, the action now taken to terminate the distributorship is illegal.

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This is a case in which petitioner has breached his solemn undertaking. The allotment is subject to fulfillment of conditions. If Oil Corporation has not taken action for some time, it cannot be construed as having been waived. In the authority cited by Shri. Hebbar, the Apex Court has extracted following passage from Manak Lal Vs. Dr. Prem Chand³ :

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"It is true that waiver cannot always and in every case be inferred merely from the failure of the party to take the objection. Waiver can be inferred only if and after it is shown that the party

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2 2021 SCC Online SC 204

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3 AIR 1957 SC 425

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W.P No.306/2021

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knew about the relevant facts and was aware of his right to take the objection in question. As Sir John Romilly, M.R., has observed in Vyvyan v. Vyvyan [(1861) 30 Beav 65, 74 : 54 ER 813, 817] “waiver or acquiescence, like election, presupposes that the person to be bound is fully cognizant of his rights, and, that being so, he neglects to enforce them, or chooses one benefit instead of another, either, but not both, of which he might claim.”

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This is not a case where Indian Oil Corporation has neglected to enforce or has chosen one benefit instead of another. It has taken action as soon as it received a complaint. Therefore, the authority cited does not lend any support to petitioner's case.

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Further, petitioner had initially chosen to file writ

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petition in this Court, then withdrew the same and later approached the City Civil Court with an application under Section 9 of Arbitration Act. Whilst the said proceedings are still pending, petitioner has again approached this Court challenging the letter of termination.

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