WA 140/2009 BEFORE HON’BLE MR. JUSTICE RANJAN GOGOI HON’BLE MR. JUSTICE B.P.KATAKEY Ranjan Gogoi, J These three Writ Appeals are directed against the common judgmen t and order dated 26.3.2009 passed by a learned Single Judge of this Court in a group of writ petitions. The appeals in question arise out of the orders passed in WP(C) Nos. 3983, 3985 and 3986 of 2006. 2. The facts are common and, therefore, may be briefly stated. The Assam State Cooperative Marketing and Consumers Federation L td. (STATFED) is a body registered under the Assam Cooperative Societies Act, 19 49 (hereinafter referred to as ’the Act’). It appears that some time in the year 2006 Distributorship Agreements in 19 towns of the State of Assam were entered into by and between the Indian Oil Corporation Ltd. (hereinafter referred to as ’the Corporation’) and the STATFED for running the business of distribution of L PG Cylinders. Once the aforesaid agreements were executed, on the basis of earli er agreements entered into by and between the STATFED and certain individuals, t he aforesaid individuals were appointed as agents to run the business on behalf of the STATFED. The STATFED went into liquidation and by an order dated 14.6.200 6 passed under Section 65 of the Act, the Society stood dissolved. Though initia lly the Corporation had agreed to continue supply of LPG Cylinders to the STATFE D notwithstanding the dissolution, by an order dated 28.7.2006 such supply was d iscontinued w.e.f. 1.8.2006. Five individuals who were running the distributorsh ip by means of the separate agreements between them and the STATFED had approach ed this Court by instituting the writ petitions, the details of which have been noticed above. 3. The learned Single Judge hearing the writ petitions took the vie w that as the Distributorship Agreement was between the STATFED and the Corporat ion, the writ petitioners before the Court were strangers to the said agreement and, therefore, they did not have any locus to institute the proceedings in ques tion. The learned Single Judge also took note of certain facts which were pleade d subsequently by the Corporation, namely, that the appointment of the individua ls as agents of STATFED to run the distributorships was contrary to Clause 21 of the agreement between the STATFED and the Corporation. Accepting the stand tak en by the Corporation that the aforesaid fact came to its knowledge only after f iling of the writ petitions, the learned Single Judge took the view that there w as a clear breach of the aforesaid Clause of the agreement warranting the action taken. Accordingly, the writ petitions were dismissed giving rise to the presen t appeals. 4. We have heard Sri AC Borbora, learned senior counsel for the app ellants; Sri MK Choudhury, learned senior counsel appearing for the Corporation and Sri AM Buzarbaruah, learned counsel appearing for the STATFED. 5. A reading of the order dated 28.7.2006 which was impugned in the writ petitions clearly reveals that the sole and the only ground for discontinu ance of supply of LPG Cylinders to the STATFED was that the Society had gone int o liquidation and had been dissolved. Breach of Clause 21 of the agreement was a fact brought out by the Corporation in its counter affidavit on the basis that the said fact was not known to the Corporation at any earlier point of time. If that be so, we do not see how we can enter into any adjudication of the question as to whether by appointment of the agents of the STATFED, Clause 21 of the agr eement between the STATFED and the Corporation had been violated. The said fact not being a part of the decision making process leading to the order dated 28.7. 2006, the present adjudication with regard to the validity of the said order, na turally, will have to exclude the said non-existent fact. The Court, therefore, would be strictly confined to the question as to whether with the dissolution of the Society under Section 65 of the Act, the Society had come to an end termina ting all subsisting business of the Society. 6. We have read and considered the provisions contained in Section 65 and 66 of the Act. Though under Section 65 a Society is liable to be dissolve d on the grounds and in the manner set forth in the said provision of the Act, u nder Section 66, a liquidator may be appointed, inter alia, to run the business of the Society. Such running of business for the purpose of winding up may be ne cessary and may also be beneficial to the Society as the same would ensure some income which may help the Society in settling its accounts. In the present case, it is not in dispute that the period of liquidation for the STATFED has been st ipulated at 7 years. In other words, the business of STATFED can continue for a period of 7 years. In such a situation, merely because the Society had been diss olved, in our considered view, the subsisting business of the Society cannot be understood to have been contemplated by law to have come to an end so as to just ify and warrant the actions taken as a legal necessity. 7. We have also noticed that under Clause 27 of the agreement there is a provision by which the Corporation, on dissolution of the entity carrying on distributorship, may decide to bring the business to an end. That, of course, would be a separate decision making process which evidently is not the subject matter of the present case. 8. On the basis of our decision as above i.e. that the action of th e Corporation in understanding the dissolution of a Society to have terminated a ll its business, by operation of law, is not correct, we will have no hesitation to interfere with the order dated 28.7.2006 impugned in the writ petitions. 9. Our interference with the order dated 28.7.2006 as above, normal ly, would require us to consider as to whether a mandamus should be issued to th e Corporation to continue supply of LPG Cylinders to the STATFED. While consider ing the above aspect of the matter, naturally, all relevant facts and circumstan ces will have to be taken into account. In the present case, we have already ind icated that there are certain vital subsequent facts which could entail serious consequences on the running of the distributorship by the STATFED. In such circu mstances, we are of the view that grant of a mandamus, as prayed for, will not b e justified. Rather and on the contrary, it would be more appropriate for us to permit the Corporation to take all further action as may be deemed fit and appro priate, but strictly in accordance with law. We make it clear that any penal act ion against the STATFED or its agents on any ground will only be taken by the Co rporation after giving due and adequate notice. Our refusal to issue a mandamus, as prayed for by the appellants, however, will not be construed as a direction to the Corporation not to revive supply of LPG Cylinders to the STATFED, if the Corporation so decides and so desires. Beyond the above, we do not propose to p ass any order with regard to the subsequent facts and developments in the case. 10. An order dated 1.10.2010 of the Corporation canceling/ terminati ng all the agreements with the STATFED has been placed before us at the hearing. We have noticed that the aforesaid termination has been made without giving any opportunity or prior notice to the STATFED. Though the aforesaid order has not been specifically challenged in the writ petitions, to avoid multiplicity of lit igations, we are of the view that the order dated 1.2.2010 being plainly contrar y to the basic principles of natural justice, the same deserves to be interfered with but leaving it open to the Corporation to take further action in the matte r as may be warranted in law by giving due and prior notice to the STATFED. Such interference and our above direction will naturally apply to the three agencies run by the writ appellants before us. 11. In the result, all the three appeals are allowed to the extend i ndicated above. 12. It is made clear that any further action in the matter by the Co rporation, if deemed necessary, will be initiated and completed at the earliest which period of time, according to us, should not exceed more than three months from the date of receipt of this order. We further direct that if the Corporatio n decides not to proceed further in the matter, the Corporation will be under an obligation to revive the supply of LPG Cylinders to the STATFED. In the event o f further action being taken it is directed that until a final decision in the m atter is taken by the Corporation, the agencies granted to the three appellants will not be settled or granted to any other person.