Allowed

Raj Shekhar Kumar and Anr. v. the State of Bihar and Ors.

Patna HC21 Jun 2013CWJC/7956/2011

Case brief

AI extract

What is this about?

The Patna High Court allowed a writ petition contending that the Licensing Authority erred in refusing to consider an application to reconstitute a deceased proprietor's firm into a partnership firm under Clause 9 of the Bihar Trade Articles (Licences Unification) Order, 1984. The Court directed the authority to process the application.

What did the court decide?

The Licensing Authority is directed to consider the petitioners' application for reconstitution and pass appropriate orders within one month.

Raj Shekhar Kumar and Anr. Vs the State of Bihar and Ors. — Service and Employment | Patna HC (2013)

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IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.7956 of 2011

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====================================================== 1. Raj Shekhar Kumar S/O Late Sidheshwar Paswan Resident Of Salempur, Police Station- Sarai, District- Nalanda. 2. Shekhar Agarwal S/O Late Sidheshwar Paswan Resident Of Salempur, Police Station- Sarai, District- Nalanda.

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The M/s. Lucky Oil Distributor, Rajgir, District-Nalanda.

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.... .... Petitioner/s Versus 1. The State Of Bihar 2. The District Magistrate, Nalanda. 3. The Sub Divisional Officer, Rajgir, Nalanda Null Null 4. The Block Supply Officer, Rajgir, Nalanda.

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The Indian Oil Corporation Limited Through Senior Divisional Munger, Block- A, Maurya Lok Complex, 3rd Floor, Dak Banglow Road, Patna-1 6. Senior Divisional Manager (Sdrsm), Indian Oil Corporation, Marketing Division, Block- A, Maurya Lok Complex, 3rd Floor, Dak Banglow Road, Patna-1

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.... .... Respondent/s ====================================================== Appearance : For the Petitioner/s : Mr. Sudhir Singh For the State : Mr. Maruth Nath Roy, A.C. to S.C.25 For I.O.C.L. : Mr. Anil Kumar Sinha Mr. Mritunjay Kumar

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====================================================== CORAM: HONOURABLE MR. JUSTICE RAMESH KUMAR DATTA ORAL ORDER

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5 21-06-2013 I.A. No.6396 of 2011 has been filed for adding M/s. Lucky Oil Distributor as petitioner No.3 to the writ application.

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It is stated that the two petitioners are partners of the said firm which is a Distributor of the Indian Oil Corporation in whose name the licence is required to be issued and thus it is a necessary party to the writ application.

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In the facts and circumstances of the case, the prayer for addition of party as petitioner No.3 to the writ petition is allowed.

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Patna High Court CWJC No.7956 of 2011 (5) dt.21-06-2013

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I.A. No.6396 of 2011 is, accordingly, disposed of.

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Heard learned counsel for the petitioners and learned counsels for the State and for the Indian Oil Corporation Limited.

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The petitioners seek direction upon the respondent authorities for allocation of monthly quota of Kerosene Oil in the name of the firm M/s. Lucky Oil Distributor.

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The petitioners‟ father was the proprietor of M/s. Lucky Oil Distributor and was having a Dealership of the Indian Oil Corporation. He was, accordingly, issued a wholesale licence No.1 of 1986 by the authorities under the Bihar Trade Articles (Licences Unification) Order, 1984. The father of the petitioner died on 27.08.2010. Subsequently, the mother of the petitioner made a request to the Indian Oil Corporation for the reconstitution of the firm as a partnership firm of her two sons which was done by entering into a dealership agreement with the registered partnership firm on 31.1.2011. The petitioners also applied to the District Magistrate, Nalanda for allocation of quota of SKO to the firm M/s. Lucky Oil Distributor annexing the letter of reconstruction of the firm and the dealership agreement made between them and the Indian Oil Corporation.

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In this regard, a report was also submitted by the Subdivisional Officer, Rajgir on 22.2.2011 recommending that on the

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Patna High Court CWJC No.7956 of 2011 (5) dt.21-06-2013

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basis of the reconstitution of the firm M/s. Lucky Oil Distributor, it may be allowed to carry on business. The District Magistrate, Nalanda, however, sought instructions and guidelines from the Department of Food & Consumer Protection by letter dated 14.3.2011. By letter dated 7.4.2011 of the Department addressed to the District Magistrate, Nalanda, it was stated that in the Licence No.01 of 1986 the name of Sidheshwar Paswan, son of Sheo Shankar Paswan is only mentioned, whereas the firm has been reconstituted as a partnership firm between two sons of Sidheshwar Paswan and, therefore, in view of the provisions of Clause 9 of the Bihar Trade Articles (Licences Unification) Order, 1984, the closed firm M/s. Lucky Oil Distributor cannot be permitted to be restarted.

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Learned counsel for the petitioner submits that the aforesaid stand of the respondents is not borne out by the provisions of clause 9 of the Licenses Unification Order as the said clause is not restrictive, rather it gives wide powers to the licensing authority with regard to the addition, deletion and alteration to the licence including that of the names of the partners, etc. of the firm.

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Learned counsel for the State, on the other hand, submits that under the said clause-9 the provision is only for addition,

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Patna High Court CWJC No.7956 of 2011 (5) dt.21-06-2013

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deletion and alteration of the names of partners, whereas the licence was issued in the name of proprietorship firm of which the father of the petitioners was the proprietor and thus the petitioners are not at all entitled to have their names entered as partners of the firm in the licence.

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Clause-9 of the Bihar Trade Articles (Licenses Unification) Order, 1984 is in the following terms:-

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“9. Addition and alteration to Licence:- The

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Licensing Authority after giving due opportunity may make necessary additions, deletions and alterations in the entries made in the licence relating to godown, place of business, names of partners, trade articles etc., on the application of the licensee.”

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It is evident from a perusal of the said clause that the same confers power upon the licensing authority to make addition, deletion and alteration in the entry made in the licence but those entries, which can be added, deleted and altered, have not been stated exhaustively in the said clause, rather some of those entries have been delineated like godown, place of business, names of partners, trade articles which are followed by the use of the term „etc.‟.

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The fact that the category of entries is not exhaustive but

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Patna High Court CWJC No.7956 of 2011 (5) dt.21-06-2013

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merely illustrative goes to show that the entries of a like nature are also amenable to addition, deletion and alteration by the licensing authority.

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The question would be whether on the death of the sole proprietor of the firm, his heirs and successors who apply for the same can be permitted to continue the firm with necessary alteration in the licence either as a proprietorship concern or as a partnership. It is evident that when a partnership firm is reconstituted with a new person entering into the said firm, he has all rights and liabilities as the earlier partners under the partnership law; the said firm is practically a new firm although the business may continue to be carried on in the name of the old firm. If such induction of an absolute stranger into a partnership firm is permissible in terms of clause-9, this Court is unable to understand as to how the immediate heirs and successors of the erstwhile licensee can be excluded from enjoying the same benefit of continuing the firm by getting their names added into the licence either as proprietor or partner provided there is no dispute within the family with regard to those person or persons being allowed to continue the business of the firm.

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In the aforesaid view of the matter, in my view the provision of clause 9 of the 1984 Order regarding addition,

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Patna High Court CWJC No.7956 of 2011 (5) dt.21-06-2013

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deletion and alteration in the entry made in the licence has full force in the facts and circumstances of the case and the licensing authority ought to have considered the application of the petitioners and not taken the stand that the same is not permissible.

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The writ application is, accordingly, allowed and the licensing authority is directed to consider the application of the petitioner in the light of the aforesaid observations made in this order and pass appropriate order in accordance with law within a period of one month from the date of receipt/production of a copy of this order.

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V.P.S.

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(Ramesh Kumar Datta, J.)

Raj Shekhar Kumar and Anr. v. the State of Bihar and Ors.

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Raj Shekhar Kumar and Anr. v. the State of Bihar and Ors.

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