Dismissed

Divine Gas Enterprises v. Government of India

Kerala HC8 Jan 2021WP(C)/11144/2020

Case brief

AI extract

What is this about?

The Court dismissed a writ petition seeking to quash the suspension of an LPG distributorship. The suspension was found justified due to partner disputes, insufficient funds, sale of licensed godown, and failure to comply with reconstitution guidelines.

What did the court decide?

Petition dismissed as writ petition lacks merits; suspension of distributorship and rejection of reconstitution request upheld.

Divine Gas Enterprises Vs Government of… — Constitutional and Fundamental Rights | Kerala HC (2021)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶2

PRESENT

¶3

THE HONOURABLE MR.JUSTICE N.NAGARESH

¶4

FRIDAY, THE 08TH DAY OF JANUARY 2021/18TH POUSHA, 1942

¶5

WP(C).No.11144 OF 2020(P)

¶6

PETITIONER:

¶7

M/S. DIVINE GAS ENTERPRISES, REPRESENTED BY AUTHORIZED ALLOTTEE, JAMES MATHAI, AGED 67 YEARS, S/O. MATHAI, MANNOOTHARA HOUSE, KATTAPPANA KARA, KATTAPPANA VILLAGE, IDUKKI TALUK, PIN-685508.

¶8

BY ADV. SRI.T.M.ABDUL LATHIFF

¶9

RESPONDENTS:

¶10

1 GOVERNMENT OF INDIA, REPRESENTED BY ITS SECRETARY TO GOVERNMENT, MINISTRY OF PETROLEUM AND NATURAL GAS, NEW DELHI, PIN-110001.

¶11

2 INDIAN OIL COOPERATION LIMITED, REPRESENTED BY GENERAL MANAGER(LPG), SOUTHERN REGION INDIAN OIL BHAVAN, 139, NUNGAMBAKKAM HIGH ROAD, CHENNAI, PIN-34.

¶12

3 GENERAL MANAGER, (LPG)-S, PANAMPILLY AVENUE, PANAMPILLY NAGAR, COCHIN-682036.

¶13

ADDL. 4 ANEESH JOSEPH, S/O. JOSEPH THOMAS, THONIKKAVIL HOUSE, MARIKKULAM KARA, AYYAPPANKOVIL VILLAGE, IDUKKI DISTRICT, REPRESENTED BY HIS POWER OF ATTORNEY HOLDER BINOY SEBASTIAN, PANAMTHOTTATHIL, MARIYAKULAMKARA, AYYAPPANKOVIL VILLAGE, IDUKKI DISTRICT, PIN 685 507

¶14

IS IMPLEADED AS PER THE ORDER DATED 16-06-2020 IN I.A. 01/2020 IN W.P.(C).

¶15

WP(C) No.11144/2020

¶16

: 2 :

¶17

R2-3 BY ADV. SRI.M.GOPIKRISHNAN NAMBIAR R2-3 BY ADV. SRI.K.JOHN MATHAI R2-3 BY ADV. SRI.JOSON MANAVALAN R2-3 BY ADV. SRI.KURYAN THOMAS R2-3 BY ADV. SRI.PAULOSE C. ABRAHAM R4 BY ADV. SMT.ELSA DENNY PINDIS R4 BY ADV. SHRI.MATHEW K.T. R4 BY ADV. SHRI.GEORGE K.V. R1 BY SRI P.VIJAYAKUMAR, ASGI

¶18

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08-01-2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) No.11144/2020

: 3 :

N. NAGARESH, J.

W.P.(C) No.11144 of 2020

¶24

Dated this the 8^th day of January, 2021

¶25

J U D G M E N T

¶26

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

¶27

The petitioner, a distributor of LPG cylinders of the Indian Oil Corporation Limited, is before this Court seeking to quash Ext.P9 order and to command respondents 2 and 3 to allow the petitioner to continue his business of LPG distributorship as per Ext.P3 appointment order in his own name as licensee.

¶28

The petitioner is a Partnership Firm represented by Authorised Allottee. The Authorised Allottee is a person with 75% disability. On account of his disability, the 1^st respondentGovernment of India as per Ext.P1 decided to allot LPG distributorship at Kattappana on compassionate ground to him. Consequently, the 2^nd respondent-Indian Oil Corporation awarded distributorship to the Authorised Allottee of petitioner. Necessary licences were obtained from various authorities

¶29

WP(C) No.11144/2020

¶30

: 4 :

¶31

and the Authorised Allottee commenced the business.

¶32

The petitioner states that as the Authorised Allottee

¶33

was physically handicapped, he was in need of a person to help him to run the business and therefore in the year 2015, a partnership was registered as Divine Gas Enterprises wherein the additional 4^th respondent was included as a partner. Ext.P5 partnership deed provided that the additional 4^th respondent shall be the Managing Partner of the Firm and he shall carry on day-to-day affairs of the Firm in the best interest of the partners.

¶34

The 4^th respondent was not satisfied with the income derived from the distributorship and he went to Dubai for better prospects. He executed a Power of Attorney in favour of one Binoy Sebastian. The relationship between the Authorised Allottee, who is the original allottee of Distriutorship, and the additional 4^th respondent got strained and the Authorised Allottee was running the business himself. The additional 4^th respondent, representing as Managing Director of the Firm, filed O.S. No.287/2019 in the Munsiff's

¶35

WP(C) No.11144/2020

¶36

: 5 :

¶37

Court, Kattappana for permanent prohibitory injunction. An interim injunction was granted in favour of the additional 4^th respondent. But, ultimately, the Munsiff's Court dismissed the application for interim injunction.

¶38

The petitioner states that respondents 2 and 3 suspended distributorship in favour of the petitioner-Firm as per Ext.P8. Ext.P8 was passed without any valid reason and without collecting explanation from the petitioner. The Authorised Allottee submitted application to respondents 2 and 3 to allow him to carry on with the business as a proprietorship establishment. However, the said application was rejected as per Ext.P9 on the ground that such conversion can be made only with the consent of the other partner.

¶39

The petitioner thereafter filed W.P.(C) No.9306/2020. This Court directed respondents 2 and 3 to consider Ext.P10 representation filed by the Authorised Allottee. However, the 1^st respondent, without hearing the Authorised Allottee and without taking into account all relevant

¶40

WP(C) No.11144/2020

¶41

: 6 :

¶42

facts, passed Ext.P12 order refusing to consider the request for reconstitution of the partnership. The petitioner therefore seeks to quash Ext.P9 order of suspension and for a direction to respondents 1 to 3 not to terminate the distributorship of the petitioner given to the Authorised Allottee as per Exts.P1, P2 and P3.

¶43

Respondents 2 and 3 resisted the writ petition filing counter affidavit. Respondents 2 and 3 stated that though the distributorship was given to the Authorised Allottee of the petitioner as a sole proprietorship in the year 1993, the Authorised Allottee sought to reconstitute the distributorship from proprietorship to partnership by inducting additional 4^th respondent. Accordingly, a fresh distributorship agreement Ext.R2(a) was entered into between the 2^nd respondent and the petitioner-Firm. While so, it was found that the Authorised Allottee has shifted his residence to Mallur and the additional 4^th respondent moved to Dubai. As per Clause 23 of Ext.R2(a) agreement, the partners of the distributorship should reside in the place of the distributorship. Respondents

¶44

WP(C) No.11144/2020

¶45

: 7 :

¶46

2 and 3 found that the distributorship was taken over by a group of people claiming allegiance to the additional 4^th respondent who was abroad. The additional 4^th respondent obtained an order of injunction from the court which restrained the petitioner from operating the distributorship. Therefore, Ext.P8 order of suspension was issued on 19.09.2019. Respondents 2 and 3 pointed out that the interim injunction was in force at that time and it was vacated only on 18.12.2019, after issuance of Ext.P8 suspension order.

¶47

Respondents 2 and 3 further stated that the distributor was not placing sufficient funds for supplies of LPG on account of the disputes between partners which resulted in severe backlog of orders from the consumers. Furthermore, the petitioner sold his licenced LPG godown along with land, which is not permissible as per Clause 14 of Ext.R2(a). It was due to these deficiencies also that the distributorship was suspended on 19.09.2019. Consequent to the suspension, all consumers of LPG from the petitioner-Divine Gas Enterprises were transferred to a nearby distributor. In fact, the 4^th

¶48

WP(C) No.11144/2020

¶49

: 8 :

¶50

respondent and persons at his behest violently prevented the officials of the Indian Oil Corporation from taking over the equipments. Respondents 2 and 3 were therefore forceed to file a writ petition, W.P.(C) No.25452/2019, seeking police protection against the petitioner and the additional 4^th respondent.

¶51

After the suspension, the Authorised Allottee approached respondents 2 and 3 seeking reconstitution of the distributorship from a partnership to a sole proprietorship of the Authorised Allottee, as per Ext.R2(b). The said letter was not accompanied by any supporting documents required for reconstitution. As per Ext.R2(c) Detailed Guidelines for Reconstitution of LPG Distributorship, application for reconstitution should be in the prescribed form. It has to be accompanied by requisite documents. Respondents 2 and 3 therefore sent Ext.P9 letter to the petitioner informing about the defects. The petitioner did not cure the defects and, on the other hand, stated that there are disputes between the partners and therefore documents cannot be produced.

¶52

WP(C) No.11144/2020

¶53

: 9 :

¶54

Respondents 2 and 3 stated that for reconstitution of partnership, Dissolution Deed along with other necessary documents is to be produced. The petitioner did not produce Dissolution Deed. In such circumstances, the application for reconstitution of the firm, cannot be allowed. Since the petitioner violated the conditions of grant of distributorship, the distributorship is liable to be suspended and respondents 2 and 3 have not acted illegally or in an arbitrary manner.

¶55

I have heard the learned counsel for the petitioner and the learned Standing Counsel appearing for respondents 2 and 3. I have also heard the learned Assistant Solicitor General of India representing the 1^st respondent.

¶56

It is true that the LPG distributorship was awarded to the Authorised Allottee on compassionate grounds pursuant to the directions of the 1^st respondent, in the year 1993. However, the Authorised Allottee sought to convert the proprietorship into a partnership firm, in the year 2015. The business under the partnership firm was suspended by respondents 2 and 3 as per Ext.P8 order dated 19.09.2019

¶57

WP(C) No.11144/2020

¶58

: 10 :

¶59

for the reason that the firm is not placing sufficient funds for supplies of LPG and as a result, refill backlog is going up in the market. Respondents 2 and 3 also noted that the additional 4^th respondent, who is a partner of the firm, has obtained an injunction order from the local court restraining the major Partner and his Manager from carrying out day-today operations of the distributorship. Respondents 2 and 3 further noted that the licenced LPG godown of the distributorship, has been sold out to a third party.

¶60

Subsequently, the petitioner approached this Court filing W.P.(C) No.9306/2020 and this Court directed the respondent to consider and pass appropriate orders on the representation filed by the petitioner. The representation was considered by the 3^rd respondent and was rejected.

¶61

Ext.R2(a) is the memorandum of agreement entered into by the firm of the petitioner with respondents 2 and 3. Clause 23 of Ext.R2(a) would show that the partners of the distributorship are to reside in the place of the distributorship. Admittedly, the additional 4^th respondent, who

¶62

WP(C) No.11144/2020

¶63

: 11 :

¶64

is one of the partners, has moved to Dubai, even according to the petitioner. By selling off the licenced LPG godown along with the land, the petitioner has violated Clause 14 of Ext.R2(a). There were insufficient funds for supplies of LPG which had resulted in backlog of LPG supply.

¶65

From the aforesaid facts, this Court finds that the suspension of the distributorship by respondents 2 and 3 is amply justified. The request of the petitioner for conversion of distributorship from the partnership Firm to a sole proprietary Firm, was rejected on the ground that the petitioner has not produced dissolution deed in respect of the partnership. Ext.R2(c) Detailed Guidelines for Reconstitution of LPG Distributorship, 2018, indicates that for reconstitution of a partnership, applicant has to produce necessary documents, one of them being Dissolution Deed. The petitioner failed to produce Dissolution Deed. Therefore, rejection of the request of the petitioner for converting the partnership Firm into a proprietary Firm or for transfer of distributorship from the partnership Firm to a sole proprietary Firm of the Authorised

¶66

WP(C) No.11144/2020

¶67

: 12 :

¶68

Allottee, cannot also be found fault with.

¶69

In the circumstances, this Court finds that the action of respondents 2 and 3 was in accordance with the Agreement entered into between the petitioner and respondents 2 and 3 and rejection of the request as regards proprietorship was based on Ext.R2(c) Guidelines. The petitioner has failed to establish violation of any right conferred.

¶70

The writ petition therefore lacks merits and is therefore dismissed.

¶71

Sd/- N. NAGARESH, JUDGE

aks/04.01.2021

WP(C) No.11144/2020

: 13 :

APPENDIX

PETITIONER'S EXHIBITS:

¶77

EXHIBIT P1	TRUE DATED	COPY O 10.05.1	F THE APPOINTMENT 993.	LETTER
EXHIBIT P2	TRUE 18.05	COPY .1993,	OF THE LETTER OF INTENDED A	DATED WARDING
	DISTR GROUN	IBUTION D.	SHIP ON COMPAS	SIONATE
EXHIBIT P3	TRUE FORM EXPLO	COPY OF THE SIVES PA	LICENCE DATED 05. DEPUTY CONTROLLE NCHAYAT.	10.2018 R OF
EXHIBIT P4	TRUE 23.02 MUNIC	COPY OF .2019 IPALITY.	THE D AND O LICENCE FROM THE KAT	DATED TAPPANA
EXHIBIT P5	TRUE PARTN	COPY OF ERSHIP D	THE RECONSTITUTION EED DATED 20.08.201	OF THE 4.
EXHIBIT P6	TRUE 23.09	COPY O .2014 OF	F COVERING LETTER THE CORPORATION.	DATE
EXHIBIT P7	TRUE NO.11 18.12	COPY 55/2019 .2019.	OF THE ORDER IN OS NO.287/2019	IN IA DATED
EXHIBIT P8	TRUE 19.09 SUSPE ENTER	COPY .2019 NSION PRISES,	OF THE LETTER 3RD RESPONDENT OF M/S.DIVINE KATTAPPANA LETTER.	DATED ISSUED GAS
EXHIBIT P9	TRUE 24.02	COPY .2020,	OF THE LETTER	DATED
EXHIBIT P10	TRUE 13.03	COPY O .2020.	F THE EXPLANATION	DATED
EXHIBIT P11	TRUE NO.93	COPY O 06/2020	F THE JUDGMENT IN DATED 23.03.2020.	WP(C)
EXHIBIT P12	TRUE 22.05	COPY .2020.	OF THE ORDER	DATED

¶78

WP(C) No.11144/2020

¶79

: 14 :

¶80

EXHIBIT P13 TRUE COPY OF THE SHOW CAUSE NOTICE FOR TERMINATING DISTRIBUTION-SHIP DATED 16/10/2020. EXHIBIT P14 TRUE COPY OF THE LEASE AGREEMENT DATED 25/06/2020. EXHIBIT P15 TRUE COPY OF THE REGISTERED LEASE DEED DATED 30/10/2020

¶81

RESPONDENTS' EXHIBITS:

¶82

EXHIBIT R2 A A TRUE COPY OF THE DISTRIBUTORSHIP AGREEMENT DATED 6.1.2015 EXECUTED BETWEEN THE 2ND RESPONDENT AND THE PARTNERSHIP FIRM EXHIBIT R2 B A TRUE COPY OF THE LETTER DATED 16.10.2019 ISSUED BY THE PETITIONER. EXHIBIT R2 C A TRUE COPY OF THE DETAILED GUIDELINES FOR RECONSTITUTION OF LPG DISTRIBUTORSHIP 2018 DATED 31.10.2018

¶83

Divine Gas Enterprises v. Government of India

Case brief

What is this about?

What did the court decide?

Divine Gas Enterprises v. Government of India

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

Case details

Similar cases

Muhammed Akhiludheen Vs Union of India

Damodaran Vs the District Collector

P.Vijayakumar Vs Corporation of Kochi

Chicago Constructions International (P) Ltd. Vs Kerala Water Authority

Navin Construction Corporation Vs Kerala Water Authority

Divya Krishnan Vs Kerala State Electricity Board Ltd.