*THE HONOURABLE SRI JUSTICE V.V.S.RAO +WRIT PETITION No. 29269 of 2009 % 20-04-2010 # Kotha Sudheer ….Petitioner AND $ The Collector (Civil Supplies), Karimnagar, Karimnagar District, And others. ...Respondents ! COUNSEL FOR PETITIONER: Sri A.Prabhakar Rao ^ COUNSEL FOR RESPONDENTS: G.P for Civil Supplies. COUNSEL FOR RESPONDENT No.6: Sri O.Manoher Reddy COUNSEL FOR RESPONDENT No.7: Sri S.Surender Reddy <GIST >HEAD NOTE: CITATIONS: AIR 1963 SC 1811 THE HON’BLE SRI JUSTICE V.V.S.RAO WRIT PETITION No.29269 of 2009 20.04.2010 Between: Kotha Sudheer ….Petitioner AND The Collector (Civil Supplies), Karimnagar, Karimnagar District And others. …Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO WRIT PETITION No.29269 OF 2009 ORDER: The petitioner filed the instant writ petition seeking a writ of Mandamus declaring the proceedings dated 19.12.2009 of the District Collector (CS)/Joint Collector, Karimnagar, whereby and whereunder Tahsildars of Chendurthy, Gollapalli, Karimnagar and Korutla were informed of the changes in allotment of Public Distribution System (PDS) kerosene to three wholesale dealers and also requesting them to take note of issue of release orders in favour of those dealers in stead of M/s.Kotha Vaikuntam and Company, Korutla (hereafter, the firm). A perusal of writ affidavit allegations, the counter affidavit filed by the Chief Regional manager of Hindustan Petroleum Corporation Limited (HPCL) and affidavits filed by impleaded parties (respondents 6 and 7) would reveal the following brief background of the case. The firm was constituted some time in 1975/1976 for doing wholesale kerosene business. The father of petitioner, Kotha Vaikuntam and his two brothers Eshwaraiah (father of respondents 6 and 7) and Shankaraiah constituted the firm with 25%, 50% and 25% share respectively. HPCL (not a party to the writ petition) appointed the firm as wholesale kerosene dealer. Initially a dealership agreement, dated 01.02.1976 was entered. From time to time dealership agreement was renewed. A new dealership agreement dated 18.11.2001 was executed by all the three partners of the firm with HPCL. 2001 Agreement signed by all partners superseded all previous dealership agreements. Indisputably, the parties are governed by the said agreement. There is also no dispute that the firm was given licence under Andhra Pradesh Petroleum Products (Licensing and Regulation of Supplies) Order, 1980 (Control Order). The petitioner alleges that the licence is valid till 31.12.2010 and that HPCL, as per the orders of the Joint Collector, is allotting the kerosene to the firm regularly. There is, however, no dispute that the dealership agreement expired on 17.11.2006. The partners Vaikuntam and Eshawaraiah expired on 17.11.2006 and 22.11.2009 respectively. Shankaraiah also expired. Therefore, it appears the Manager, RE&MIS of HPCL addressed a communication dated 17.12.2009 to first respondent informing that Eshwaraiah one of the partners died. Considering the same, the impugned Memo was issued withholding the allocation of monthly quota of kerosene. As noticed supra, respondents 6 and 7 who were son and daughter of Eshwaraiah filed implead petition claiming share in the firm’s business. It appears after death of Eshwaraiah, his daughter Bhagya Lakshmi – respondent No.7 raised dispute and second respondent herein gave time to respondents 6 and 7 to resolve the dispute. In the meanwhile, other two partners also died and therefore, kerosene stock was withheld by impugned memo. Counsel for respective parties made submissions. The standing counsel for HPCL besides other contentions raised preliminary objection regarding maintainability of writ petition. His contention is that the dealership agreement was entered into by HPCL with the firm whereas HPCL itself is not made a party. In the context of constitutional remedy under Article 226 of Constitution of India having regard to the Article 12 and 19(1), when an incorporated juristic person is sued, making the company represented by its Managing Director or Compliance Officer is mandatory. When any juristic person binds or obliges itself under an agreement, the same can be enforced only against the juristic person for the purpose of Article 19 rights, which has been extensively dealt with by a nine- Judge Bench of the Supreme Court in State Trading Corporation Limited v Commercial Tax Officer[1]. Further, as per Order XXIX of Code of Civil Procedure, 1908 (CPC), a Corporation can sue or be sued represented by its Secretary or any Director or Principal Officer. Indeed Form-I of Appendix ‘A’ to CPC gives the title of the suits. These support the HPCL counsel and if a relief is claimed only against its officials, the writ petition would not have been maintainable. But in this writ petition, what is impugned is an order of the first respondent stopping the monthly allocation of kerosene oil, and therefore, the writ petition cannot be rejected on that ground alone. The reason for stopping the supply of kerosene to the firm is that the partner died and the firm has suspended the sales. Can it be a valid reason? Answer must be in the affirmative. There is no dispute that all the three partners who constituted the firm from 1976 till recently are no more. Therefore, the partnership cannot be said to be in existence, it stood dissolved. The Deed of Partnership between the brothers is not placed before this Court nor they produced any such Deed of Reconstituted Firm with the legal heirs of Eshwaraiah joining the firm or after the death of three brothers, all legal heirs constituting the firm. Indeed as seen from the affidavit, respondent No.7 raised dispute and from this an inference can be drawn that after the demise of all the partners, the firm was never reconstituted. Clause 31 of the Dealership Agreement, dated 18.11.2001 reads as under. 31. Notwithstanding any thing to the contrary contained hereinabove the Corporation shall be entitled to terminate this agreement at once upon or at the time of happening of any of the following: (A) If the dealer shall commit a breach of any of the covenants and stipulations contained in the agreement, and fail to remedy such breach within four days of the receipt of a written notice from the Corporation in that regard. (B) Upon (i) The death or adjudication as insolvent of the dealer, if he be an individual; (ii) The dissolution of the partnership of the dealer’s firm or the death or adjudication as insolvent of any partner of the firm, if the dealer be a firm; (iii) The liquidation, whether voluntary or otherwise or the passing of an effective resolution for winding up, if the dealer be a company or cooperative society. (F) If the licence issued to the dealer by the relevant authorities for the storage of petroleum products supplied by the Corporation is cancelled or revoked. A plain reading of clause/covenant 31(b)(ii) supports HPCL’s contention that on the death of three partners, HPCL terminated the agreement. Secondly, the averment of HPCL that the dealership agreement expired on 17.11.2006 remains uncontroverted. Unless and until dealer has a valid dealership agreement, grant/renewal of licence under Petroleum Control Order does not arise. The counsel for the petitioner relies on clause 14 of dealership agreement, which reads as under. The dealer shall not sell, assign, mortgage or part with or otherwise transfer his interest in the dealership or the right, interest or benefit conferred on him by this agreement to any person in the event of the dealer being a partnership firm any change in the constitution of the firm, whether by retirement, introduction of new partners or otherwise howsoever will not be permitted without the previous written approval of the corporation notwithstanding that the corporation may have dealings with such reconstituted firm or impliedly waived or condoned the breach or default mentioned hereinabove by the dealer. In the event of the death of any of the partners, the dealer shall immediately inform the Corporation giving the necessary particulars of the heirs and legal representatives of the deceased partner and it shall be the option of the Corporation either to continue the dealership with the said firm or to have a fresh agreement of dealership with any reconstituted firms or to terminate the dealership agreement and the decision of the Corporation in that behalf shall be final and binding on all the parties concerned. No claim on premature termination for compensation or otherwise will be made or sustainable against the Corporation on account of such termination. It is no doubt true that in the event of death of partners, HPCL may either continue the dealership with the firm or reconstitute firm or to terminate the dealership agreement. Clause 14 in the considered opinion of this Court does not override clause 31 because the latter has non-abstante clause. Even if clause 14 confers discretion of HPCL, the same has to be exercised keeping in view clause 31. Further more, it is not the case of the petitioner that he and other legal heirs of partners approached HPCL for dealership. If any such application is pending by all the legal heirs, it is always open to HPCL to consider the same. In the case on hand, HPCL took the stand that the dealership agreements stood terminated and therefore, the impugned order cannot be faulted. Yet another submission made by counsel for petitioner is based on Revised Policy Guidelines for reconstitution of RO dealerships/SKO – LDO dealerships. Guideline 3.5 is to the effect that in case of death of one of the partners, the partnership firm shall be reconstituted with legal heirs of the deceased partner and surviving partner. Guideline 3.5 also provides that if there is no legal heir or the legal heir has expressed unwillingness, the dealership/distributorship shall be reconstituted with surviving partners. All these have no application to the facts of the case for two reasons. First, admittedly the Revised Policy Guidelines are issued for implementation with effect from 01.12.2008 and secondly, it takes care of a situation where one of the partners of the firm dies. It has no application to a situation where all the partners expired. Clause 31 of the Dealership Agreement is unambiguous and therefore, Revised Guidelines cannot be read into binding dealership agreement. As already noticed, dealership agreement expired on 17.11.2006 and as per clause 33 thereof, and even if the firm survived the death of the three partners, in the absence of any dealership agreement, the District Collector cannot be directed to continue to allocate kerosene oil to the petitioner. In the result, for the above reasons, the writ petition is without any merit and is accordingly dismissed. _______________ (V.V.S.RAO, J) 20.04.2010 Pln Note: LR copy be marked. (by order) pln [1] AIR 1963 SC 1811