The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK WP(C) No.9382 of 2025 M/s. Capital Indane, Samantarapur, Khurda ..... Petitioner Represented By Adv. - Sri Ramakanta Mohanty, Biswajit Nayak -versus- 1) Indian Oil Corporation Ltd. (iocl), Bbsr 2) Divisional Lpg Sales Head, Dlsh, Bbsr Indane Divisional Office 3) Chief General Manager Lpg, Odisha State Office, Iocl, Bbsr 4) Ashabari Rath ..... Opposite Parties Represented By Adv. - Sri Subir Palit, Sr. Advocate, Debaraj Mohanty, A.mishra, B.p.panda, D.behera CORAM: THE HON'BLE MR. JUSTICE ADITYA KUMAR MOHAPATRA ORDER 08.05.2025 Order No. 05. 1. This matter is taken up through Hybrid Arrangement (Virtual /Physical Mode). 2. Heard Mr.R.K.Mohanty, learned senior counsel for the Petitioner and Mr.Subir Palit, learned senior counsel assisted by Mr.Debaraj Mohanty, learned counsel for the Opposite Parties-Indian Oil Corporation Ltd. Perused the pleadings of the respective parties as well as the documents annexed thereto. 3. By filing the present Writ Petition, the Petitioner has approached this Court with a prayer for quashing the impugned suspension letter dated 28.03.2025 under Annexure-7 to the Writ Petition issued by the IOCL thereby Page 1 of 8. suspending the distributorship business of the Petitioner with a further prayer for a direction to the Opposite Party-IOCL to permit the Petitioner to continue with the gas distributorship for the rest of the period of the agreement. 4.
Legal Reasoning
The factual background, as is evident from the pleadings in the Writ Petition, in short, is that initially a lease deed was executed between Opposite Party No.4 and one Anupama Sarangi on 21.04.2012. A partnership deed was executed between Upendra Kumar Mohapatra, the Petitioner and Opposite Party No.4 and obtained an explosive licence on 28.04.2022. Initially the Petitioner was a proprietorship concern. Thereafter, the same was converted to a partnership firm. In execution of the partnership deed dated 29.03.2022, under Annexure-1/A, the Petitioner, Upendra Kumar Mohapatra, was inducted as a partner with 49% share of the partnership firm and the Opposite Party No.4 with 51% of the share. 5. The Writ Petition further reveals that the agreement executed by the IOCL-Opposite Party provides under Cause- 29 that no changes in the partnership deed, including further reconstitution, is permissible in the event of death, retirement, insolvency or any reason whatsoever shall be made with prior permission of the IOCL. On 08.04.2022, the Opposite Party No.4 executed a General Power of Attorney in favour of the Petitioner to act on her behalf. Accordingly, partnership firm obtained an explosive licence which was granted in favour of the partnership firm on 28.04.2022 and the same was valid up to 30.09.2025. Finally on 08.06.2022 the IOCL granted the Page 2 of 8. distributorship to the Partnership firm by executing a memorandum of Agreement which was signed by the Petitioner as well as Opposite Party no.4 along with IOCL representative and the same is valid till 2027. 6. The Writ Petition also reveals that the Distributor shall not sell, assign, mortgage or part with or otherwise transfer his interest in the distributorship or the right, interest or benefit conferred on him by this agreement to any person. Furthermore, in the event the Distributor being a partnership firm and if any change is made in the constitution of the said Firm, the same shall not be permissible without the prior approval of the IOCL. Similarly Clause 23(c)(iii) provides the Distributor shall not effect any change in its constitution whether appointment of whole time office bearers or elected members or in the terms of the Deed of Partnership all of the Bye laws as the case may be. 7. While the matter stood thus, the Opposite Party no.4 alleged cancellation of Power of Attorney under Annexure-3 unilaterally with effect from 07.12.2023 without the knowledge of the Petitioner. Further, the Opposite Party No.4 intimated the said fact to the IOCL vide his letter under Annexure-B/2 to the Counter Affidavit dated 11.12.2023. Similarly, the original owner purportedly cancelled the lease by executing a cancellation deed on 07.03.2024 without intimating such fact to the IOCL as required in the agreement. However, despite such change without intimation to the IOCL the distributorship was continued in the demised premises till the same was detected by the IOCL and the subsequent action was taken by Page 3 of 8. suspending the distributorship licence. It further appears that the original owner who had cancelled the lease deed was accepting rent after cancellation of lease deed. Thus, it was argued on behalf of the Petitioner that in the present case the lessor was receiving rent from the lessee in respect of the demised premises. As such, it is asserted that the tenancy still subsists. 8. On 06.12.2024 the IOCL purportedly received a letter written by Opposite Party No.4 informing the Corporation that he has resigned from Partnership. The Opposite Party- Corporation, immediately without taking any coercive measure, asked the Opposite Party No.4 to produce a copy of the Partnership Dissolution Deed. While this was the position, the Petitioner received a show cause notice on 27.12.2024 under Annexure-5 to the Writ Petition from the IOCL. The Petitioner approached the IOCL through his letter dated 31.12.2024 under Annexure-6 seeking some time to submit his reply to the show cause on the ground that the Petitioner is severely ill and was not in a position to file reply to the show cause notice. It is
Legal Reasoning
alleged by Mr. Mohanty, learned senior counsel for the Petitioner that no decision was taken by the IOCL on the letter
Decision
dated 31.12.2024 under Annexure-6 to the Writ Petition and no intimation has been given to the Petitioner as revealed under Annexure-6. 9. On 30.01.2025 the IOCL issued a fresh show cause notice as is evident from Annexure-E/2 to the Counter Affidavit. Learned counsel for the Petitioner denied to have received show cause notice as the same was not served on the Page 4 of 8. Petitioner. Though Mr.Palit, learned senior counsel for the Opposite Party-Corporation on the other hand contended that the notice dated 30.01.2025 was sent through registered post. However, no postal A.D. was produced either along with the Counter Affidavit or during the hearing of the present Writ Petition. 10. Finally, Mr.Mohanty, learned senior counsel for the Petitioner submitted that without affording any opportunity of hearing to show cause, the Opposite Party-IOCL passed the impugned order of suspension under Annexure-7 to the Writ Petition. Being aggrieved by such suspension order, the Petitioner has approached this Court by filing the present Writ Petition with the relief as prayed for in the Writ Petition. 11. Mr.Palit, learned senior counsel for the Opposite Party- IOCL Corporation at the outset contended that enough opportunity was given to the Petitioner to submit his reply to the show cause. Further, drawing attention of this Court to the Counter Affidavit filed by the Opposite Parties, learned counsel for the Opposite Party IOCL contended that the Petitioner has admittedly violated the agreement executed with the Opposite Party-IOCL. On such ground, the IOCL issued a show cause notice which was never attended to by the Petitioner. He further specifically contended that the Petitioner has violated Clause-27b (ii) & (m) as well as Clause-14(a) of the agreement. Moreover, it was argued that the agreement be read as an entirety and not in a piece meal manner. He further contended that although sufficient opportunity was given to the Petitioner, however, it was unable to file his reply to satisfy the Page 5 of 8. IOCL with regard to non-implementation of the condition of the agreement. Further, it was contended that admittedly one of the partner has left the partnership firm, therefore, there is definitely a reconstitution of the firm which was not intimated to the IOCL. 12. The development of the facts further reveals that there is a dispute between the partners. Learned counsel for the Opposite party-IOCL further contended that neither the Corporation has any interest in the inter se dispute between the partners nor does the corporation wish to be dragged into such inter se dispute between the partners of the partnership firm. He further contended that they have to act in accordance with law and the provisions of agreement executed between the parties while respecting the contractual relationship between the partnership firm and the Corporation. He further contended that since admittedly there is a violation of the condition of the contract the distributorship was suspended after providing sufficient opportunity to the Petitioner to give his reply and to satisfy the authority with regard to non- implementation of any of the condition of the contract. Since the Petitioner could not satisfy the Opposite Party-Corporation, while acting in accordance with law as well as the terms of the contract as well as Regulation governing the field, the distributorship has been kept under suspension. He further argued that suspension cannot be read as a termination of the contract. Therefore, enough opportunity was given to the Petitioner to explain his position before the Opposite Party- IOCL. However, the Petitioner has only to clarify his position and satisfy the authority with regard to the legal as well as Page 6 of 8. contractual compliance. In such view of the matter, learned senior counsel contended that the IOCL has not committed any illegality in passing the order under Annexure-7 to the Writ Petition. 13. Having heard learned counsel for the respective parties, on a careful examination of the factual background of the present case, this Court observes that although a contractual relationship was brought into existence between the Petitioner and the Opposite Party-IOCL by executing an agreement lawfully, however, subsequently it was found that certain disputes arose between the partners which has led to cancellation of lease deed as well as the resignation of one of the partners from the partnership firm. Thus, the ground position which was existing at the time of execution of agreement has definitely changed subsequently. In the aforesaid factual backdrop, this Court is of the view that the IOCL, by issuing a show cause notice to the Petitioner, has provided them opportunity to place the case before the Opposite Party-Corporation. Further, the record reveals that no such reply was filed by the Petitioner to the show cause notice issued by the Corporation. Thus, this Court has no hesitation in coming to the conclusion that the Corporation has acted as per the terms of the agreement as well as in accordance with law. 14. However, considering the contentions raised by Mr.Mohanty, learned senior counsel for the Petitioner that the Petitioner has sought for some time on the ground of illness and before passing the impugned order dated 28.03.2025, under Annexure-7, no opportunity whatsoever was provided to Page 7 of 8. the Petitioner to put forth his case before the Opposite Party- Corporation, this Court is of the view that the Opposite Party- Corporation should have provided an opportunity before passing the impugned suspension order dated 28.03.2025. In such view of the matter, the present Writ Petition is disposed of by directing the Petitioner to approach the Opposite Party- Corporation to file show cause reply within two weeks taking therein all the grounds. In such eventuality the Opposite Party- Corporation shall consider the same in accordance with Rules and Regulations as is applicable, and take a final decision in the matter within eight weeks thereafter. Till a final decision is taken the impugned suspension order dated 28.03.2025 under Annexure-7 shall be subject to the final decision of the Corporation to be taken after considering the show cause. Further, it is directed that till a final decision is taken by the IOCL-Opposite Party No.1, the interim arrangement made by this Court vide order dated 05.05. 2025 shall continue. 15. In view of the aforesaid order passed in the Writ Petition, the CONTC be dropped. RKS ( A.K. Mohapatra ) Judge Page 8 of 8. Signature Not Verified Digitally Signed Signed by: RAMESH KUMAR SINGH Designation: AR-CUM-Senior Secretary Reason: Authentication Location: High Court of Orissa Date: 10-May-2025 19:12:17