Dismissed

Subhash Chandra Jaiswal v. the Union of India and Ors.

Patna HC14 Feb 2013CWJC/7855/2010

Case brief

AI extract

What is this about?

This was a writ petition by a petitioner claiming his right to reconstitute a partnership firm and revive its SKO agency suspended by Indian Oil Corporation. The petition was dismissed as the agency was awarded to the firm, and reconstitution requires Corporation approval and consent of all existing partners, of whom Respondent No. 7 dissenting.

What the court decided

AI extract

Subhash Chandra Jaiswal Vs the Union of India and Ors. — Property and Title | Patna HC (2013)

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IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.7855 of 2010

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====================================================== 1. Subhash Chandra Jaiswal S/O Late Jagdish Prasad Jaiswal R/O Kagzi Mohalla, P.O. and P.S.- Siwan, Distt.- Siwan, Presently Managing Partner Of M/S Kamla Stores, Siwan .... .... Petitioner Versus 1. The Union Of India through the Secretary Government Of India, Petroleum Department, Shastri Bhawan, New Delhi 2. The Chairman Indian Oil Corporation Ltd., New Delhi 3. The General Manager Indian Oil Corporation (M.D.), Lok Nayak Bhawan, Dak Bungalow Road, Patna 4. The Senior Divisional Retail Sales Manager Indian Oil Corporation Ltd., 3-A, Maurya Lok Complex, Patna 5. The Divisional Retail Sales Manager Muzaffarpur, Krishna Complex, Akhada Ghat Road, Muzaffarpur 6. The Assistant Retail Sales Manager Indian Oil Corporation Ltd., Marketing Division, Chapra, At + P.O. & Distt.- Chapra 7. Smt. Sri Devi W/O Yogendra Prasad Jaiswal Presently Residing At Aamgola Padaw Pokhar, Lane No.1, P.O.- Ramana, Muzaffarpur .... .... Respondents ====================================================== Appearance : For the Petitioner/s : Mr. Vikas Kumar Mr. Yashwant Kumar Chaman For the I.O.C. : Mr. Kali Das Chatterji, Sr. Advocate Mr. Amlesh Kumar Verma For Respondent No.7: Mr. T.N. Maitin, Sr. Advocate Mr. Rajeev Kumar Sinha ====================================================== CORAM: HONOURABLE MR. JUSTICE RAMESH KUMAR DATTA ORAL ORDER 11 14-02-2013 Heard learned counsel for the petitioner and learned counsels for the Indian Oil Corporation and for respondent No.7. This is the second round of litigation by the petitioner. The direction sought by the petitioner is upon respondent No.3 to consider the earlier proposal dated 24.8.2006 for reconstitution of the firm, namely, Kamla Stores, Siwan with new partner and also

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Patna High Court CWJC No.7855 of 2010 (11) dt.14-02-2013

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to reconstitute the same without insisting on the shortcomings mentioned in the letter dated 11.10.2006 and after reconstitution of the said firm to allow the petitioner to run the SKO agency which was suspended by letter dated 7.4.2006.

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Shorn of unnecessary details, the facts of the case are that the firm M/s. Kamla Stores, Siwan was appointed as an Agent of the Indian Oil Corporation Ltd. dealing with wholesale Kerosene oil L.D.O. business since 1963. On 7.12.1971 a partnership deed was executed in which one Bhagirathi Devi, who died on 26.5.2004, was given 50% share; the petitioner had 35% share and respondent No.7 Smt. Sri Devi had 15% share. Upon the death of Bhagirathi Devi, the petitioner wrote to the respondent Corporation that the firm has been reconstituted by inducting the son of Bhagirathi Devi upon which the respondent Corporation took the stand that unilaterally the reconstitution of the firm cannot be changed by the petitioner without the consent and approval of the respondent Corporation. Thereafter, the petitioner got an arbitrator appointed unilaterally without the consent of the other side, particularly Smt. Sri Devi and got an award passed dissolving the firm and again made an application for reconstitution. The petitioner, due to non-communication of any order upon the application for reconstitution, approached this Court by filing C.W.J.C. No.7463 of 2007, which was disposed of

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Patna High Court CWJC No.7855 of 2010 (11) dt.14-02-2013

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by order dated 4.1.2010 directing the respondent to communicate the reason for its inability to act upon the request of the petitioner for reconstitution of the firm.

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By letter dated 4.2.2010 of the respondent Corporation, it was stated that since the SKO Agency was closed for more than three years, therefore, as per prevailing policy it was not possible to revive the SKO Agency. It was further stated that in the meantime, there were a few modifications in the reconstitution policy from December, 2008 and so the petitioner may apply with fresh reconstitution proposal as per the format enclosed, which may be considered after consulting the higher office. The petitioner applied on 12.5.2010 but claims that no action has been taken on the same.

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In the counter affidavit filed on behalf of the respondent Corporation, the stand taken is that upon the death of Bhagirathi Devi on 26.5.2004, the Corporation by letter dated 12.6.2004 advised the surviving partners to reconstitute the firm in accordance with the Rules and Guidelines but received the letter dated 20.10.2004 from one of the surviving partners, respondent No.7 indicating/communicating a series of differences/disputes between the partners. Again, the firm was advised to get the firm reconstituted by 30.12.2004. Ultimately, on account of differences and disputes between the partners when the firm was not

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Patna High Court CWJC No.7855 of 2010 (11) dt.14-02-2013

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reconstituted in accordance with the Rules and Guidelines, by letter dated 7.4.2006 the supply to the firm was suspended from Ist April, 2006.

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It is also the stand of the Corporation that the petitioner should not have inducted the son of the deceased partner without the consent of the Corporation which is in clear breach of the dealership agreement.

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It is the further stand that respondent No.7 being recorded as partner in the Corporation, it is not legally permissible for the Corporation to accept her forcible exclusion by the other partners from any reconstitution proposal.

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With respect to the arbitral award it is stated that the Corporation was not a party to the said award and the same is not binding upon it.

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Learned counsels for the Corporation and for respondent No.7 also submit that the appointment of the arbitrator was unilateral and hardly has any binding force. It is also the stand of the Corporation that the award, as a matter of fact, dissolved the firm and thus there is no partnership firm in existence. The same having been obtained at the instance of the petitioner, it can only mean that there is no partnership firm left to be reconstituted as per the action taken by the petitioner himself.

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Learned counsel for the petitioner is unable to support the

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Patna High Court CWJC No.7855 of 2010 (11) dt.14-02-2013

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writ petition and the right of the petitioner on any legal basis except to show that since in the letter dated 4.2.2010, the Corporation had directed the petitioner to apply with fresh reconstitution proposal as per format enclosed and the said application having been filed it may be directed to consider the same.

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It is sought to be argued by learned counsel for the petitioner that the arbitral award is a nullity as the appointment of the arbitrator was contrary to the provisions of the Arbitration and Conciliation Act, 1996.

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It is also argued by learned counsel that the respondent No.7 being only a partner to the extent of 15% share cannot be permitted to jeopardize the interest of the firm by her.

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Learned counsel for the Indian Oil Corporation submits that the firm can only be reconstituted in accordance with law after obtaining the approval and consent of the respondent Corporation, which was never done in the present matter. It is also submitted by him that reconstitution should also be made with the consent of the remaining partners after giving details of all the legal heirs and representatives of any deceased partner. It is urged that in the present matter the petitioner unilaterally has sought to reconstitute the firm without the consent of one of the earlier partners who is on the records of the Indian Oil Corporation.

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Patna High Court CWJC No.7855 of 2010 (11) dt.14-02-2013

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It is contended by learned counsel for the Corporation that it is the firm alone with which the Corporation is dealing, and if one of the partners is unwilling to reconstitute the firm then there would be no question of considering any proposal for reconstitution of the firm by an individual person, who may have been the partner of the firm.

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Respondent No.7 supports the aforesaid stand taken on behalf of the respondent Corporation and submits that the petitioner cannot be permitted to take over the business which belongs to the partner unilaterally on his own without the consent of respondent No.7 which has not been done in the present matter and thus, as a matter of fact, there is no proper application for reconstitution of the firm, which can be considered by the respondent Corporation.

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On a consideration of the rival submissions of learned counsels for the parties, I do not find any substance in the submission of learned counsel for the petitioner and I find substantial force in the submission of learned counsels for the respondent Indian Oil Corporation and the respondent No.7.

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Evidently, the dealership licence was awarded to the partnership firm. Any reconstitution of the firm on account of any death can only take place with the approval and consent of the respondent Corporation but such reconstitution must have the

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Patna High Court CWJC No.7855 of 2010 (11) dt.14-02-2013

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consent of the existing partners. If the partners fight among themselves, then there is no option to the Corporation to reconstitute the firm without the consent of the remaining surviving partners, who existed on the record of the Corporation as the partners of the firm in question.

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Apart from that in the present matter it is evident that the respondent No.7 is not willing to have the firm reconstituted. In the said circumstances, there can be no question of any consideration of the unilateral proposal of the petitioner for reconstitution of the firm by the Corporation. Thus, it cannot be said that any legal application for reconstitution is pending before the respondent Corporation after the letter dated 4.2.2010 was issued by the Corporation to the firm M/s. Kamla Stores and not to the petitioner in his individual capacity. Hence no direction, as sought by the petitioner, can be issued in his favour.

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The writ application, being devoid of any merit, is accordingly dismissed.

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(Ramesh Kumar Datta, J)

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V.P.Sinha/-

Subhash Chandra Jaiswal v. the Union of India and Ors.

Case brief

What is this about?

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Subhash Chandra Jaiswal v. the Union of India and Ors.

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